How AI and robots are changing the world of trading

Disruptive technologies in trading

Artificial Intelligence (AI) and robots, automated trading software, are gradually becoming a part of people's everyday lives, particularly in business. These two phenomenons are now also becoming key components of the trading sector, be it forex or stock trading. Although there are critics of using these disruptive technologies in trading, many are of the belief that they are worth investing in because they do away with humanly flaws and emotions when trading.

Moreover, they act as a systematic and dependable way of ensuring consistent participation in the markets, based on the input parameters. Other arguments in favour of them are that they are cost-effective as they significantly cut down operating costs through requiring minimal human resources. Additionally, to an extent, they also minimise the risk of failure or losses as trading is based on historical data and analytics that project a certain outcome.

Despite the advent of digital technologies and digital operations across the globe, some conservative traders remain opposed to robots performing forex trading, particularly given the sensitivity of finances and potential of financial loss, this also applies in the case of stock trading. It must be noted that one of the major drawbacks of automation in trading is that it cannot immediately react to unexpected market fluctuations and the impact of unprecedented global conditions, which could either lead to great losses or missed opportunities of considerable gains.

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Companies that have opted for the 'smarter trading' option

While AI and robots make business sense because they reduce operating costs, a lot can be said about how they are contributing to unemployment. This is quite possibly one of the biggest arguments by opponents on how they are infiltrating the trading industry. Despite the naysayers, AI is perceived as the future of trading as it is more time and cost effective, whilst allowing for several trading positions to be opened with minimal human intervention. This is just one of the reasons why some companies have jumped on the bandwagon and opted to explore trading technologies for what they view as smarter trading. Below are a few examples of such companies:

Epoque

Located in Switzerland, Epoque has a fully automated trading option that comprises three so-called engines. The first observes and analyses potential trades, the second creates orders and performs operational actions, and the third oversees active trades and improves overall performance.

AITrading

Aptly named, AITrading does exactly that – it makes use of AI in a holistic manner. Essentially, its platform is aimed at increasing customers' earnings by scanning markets and identifying optimal trading opportunities. One may assume that this is guided by historical data and future projections of the market. Due to the growing impact of AI and automation in trading, it is no surprise that in early 2019, the company launched a crowdfunding campaign for its trading platform. This is testament of its belief in the impact that automation will play in the world of trading in years to come.

Trade Ideas

San Diego's Trade Ideas makes use of an AI-powered, self-learning robo-trading platform called Holly. The platform presents a multitude of possible trading scenarios to increase the probability of success for future trading sessions. Of the scenarios presented, only those with a success rate of 60% or more are presented to traders for consideration in their future trading activities.

Kareem Winters

Update 01 August 2021