How Artificial intelligence and machine learning has transformed trading

The whole point of artificial intelligence is replacing humans, and with it, increasing efficiency, effectiveness and productivity. Gone are the days when computers were expensive, and artificial intelligence was only used for big projects. Now Artificial Intelligence and machine learning have seeped into our daily lives, and influence to make things better and easier every day.

Artificial Intelligence

Why let AI aid the world of trading?

Financial experts see that AI is transforming the world of trading, too, and making it more profitable and equitable. What could take months for humans, takes minutes for machines, and that is no unknown fact. Robo-advisers are designed and implemented in such a way that can analyze billions of data in a matter of seconds so that you can make the best predictions on the basis of those prices.

Furthermore, it gets the timing for trading right by executing trades at the most profitable hour, for it is capable of carrying on several trades simultaneously in the market. The reason AI has taken over the world of trading too, like every other world that reaps the benefits of machine learning, is basically because of the aid it provides in the right analysis of data, accurate predictions and forecasting, and proper execution of tasks on the right time. Even in mitigating the number of risks involved, which is a common reality whenever you’re dealing with the stock market and volatile financial markets.

Uses of AI in trading

To go deeper into the technicalities of how actually AI is used in trading related ventures, we’ve to talk about the specific uses of AI and machine learning in trading:

  • Increase in trading speed: We live in a fast world, that is globally connected and always available at the tip of your fingertips. With the right AI, you can be up and trading every second of your existence. And, we see you, we mean the algorithm automated to do the job for you. There is no need for human intervention for trading simultaneously, whenever you want to.
  • Prediction based trading: All trading happens on the basis of the predictions you make. When your predictions are backed up by data provided by AI, the chances of accuracy are significantly higher. It uses sentiment analysis and a swoop of the market to determine what your best chances are, what games the expert traders are playing in the market, and how to best play your game and bring in huge profits for you.
  • Formation of Patterns: What is the point of all the analysis of data points, you might ask? Well, it is to form patterns and predict wins, basing solely on how they have been functioning in the market before you started trading. It is to see how a particular stock does better than the other, and what factors determine more wins. Should you opt for a long term approach or a short term one? Should you lose some to win some? All these answers are easily procured if you’re allowing AI to follow and implement patterns for you, predict previous ones, so that you are always learning and it is doing the job of automated trading for you, on the basis of analysis and data.

Besides this, machine learning can resolve big problems in the trading domain related to optimization and predictions. The biggest aid of machine learning in the domain of trading is to help with future predictions, on the basis of previous data and their proper analysis. All trading platforms are equipped with proper chatbots these days so that they can improve the way trading is done. They keep learning every day and do not require any semblance of human intervention to function effectively. You can ask a chatbot about current offers – it’ll not only provide you with the latest trends in the stock market but also tell you the size of the trade. It’ll give you this data on the basis of other trading experiences and market possibilities. You’ve to make wise decisions, not just once or twice, but consistently and taking the help of AI and machine learning helps you to do just that. You’ll remove the possibility of human errors, and hence increase your chances of profiteering significantly.

Implementations of machine learning usually involve easy monitoring of more number of markets for the traders. The more the markets trader analyses, the more are the chances of a trader to get the most profitable deals out of it. Other than that, it also involves accelerating the search for the best strategies in place, so that you also enjoy a competitive advantage over your other folks, and you have automation to fall back upon, in case of any support you would require. From deep learning to neural networks, to optimizing algorithms, you can take advantage of numerous features of AI and machine learning to make your trading experiences positive and profit bearing!

Charu Verma
Charu decided to unite her Honors Degree in New Media and lifetime of geekiness to pursue a career in tech and gaming journalism. You can usually find her writing about a variety of topics and drooling over new gadgets and games.