How AI Will Change the Future of Trading

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How AI Will Change the Future of Trading

CFO Tech Outlook | Friday, January 18, 2019

The complexity of the operations in the financial sector made it the first to adopt Artificial Intelligence in the early years of its emergence. The significantly larger data sets and the need for improved customer experience, and operational efficiency led in embracing the emerging technologies. With the developments in computing and technology, the decision making based on human intuition and extensive knowledge of finance and economics was replaced. Financial organizations started formalizing and automating their trading operations in the form of trading rules. This rule-based system was modeled on both market and fundamental data analysis, which comprises price and volume information, and information about traded assets.

One natural step to the rule-based system is trading bots. They are software programs that interact directly with financial exchanges thus transforming the markets. These trading bots utilize potentials of artificial intelligence.

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AI-based algorithms have also contributed to trading by unlocking the dynamics of the market and ensuring overall success in investment. Algorithm trading is providing market intelligence which can be helpful to take long term trading decisions. This platform allows speedy and secure transactions too. The benefits of algorithmic trading are

• Speed: The trades are made in a fraction of seconds with greater opportunities at a better price.

• Accuracy: Avoids the human error of poor decision making and allows backtesting to remove flows in the model.

• Reduced cost and time: Saves time and money for more time to explore new opportunities.

Algorithmic trading can pile up the profits of trading institutions with reliable market insights. AI harnessing AI trading can offer increased efficiencies and higher returns on investments for the trading organizations. Today this platform is being available for the general public so that they can have a tactical advantage when engaging in trade.

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