How AI Is Being Used in Modern Trading

Traders working in the forex market – and the financial markets in general – have long relied on technology for different things.

20:20 30 June 2020

Technical indicators and signal generators have certainly made analyzing the market easier. There are also more trading platforms to choose from, each with features like automation and integration of fundamental analysis making life as a trader easier.

 

In recent years, however, there has been a big shift towards big data and machine learning. With more data streams to tap into, traders can better understand the market by gathering and processing a large amount of relevant data from hundreds of sources. The next big thing in modern trading is artificial intelligence or AI, and its implementation is only getting more exciting.

 

Better Big Data Analysis

 

AI has one thing that human analysts don’t: a massive analysis capacity. A well-trained AI can go through petabytes of data in no time at all. The technology behind AI itself also makes creating an AI capable of processing relevant data easier.

 

This means AI can sort through noise in data, find relevant information, and generate insights, all over a short period of time. AI can also be trained to perform other, more advanced tasks – we will get to this in a second.

 

The result is the utilization of big data in the financial markets like never before. Traders are now investing heavily in large data warehouses and new sources of information, all so they can analyze and understand the market with greater precision.

 

AI in Advanced Use Cases

 

Going through transactional data is not the only thing AI is capable of. As mentioned before, the development in technologies such as cloud computing and machine learning leads to more capable AI and more advanced implementation of it in the financial markets.

 

AI can now look at the market in a holistic way and perform an in-depth analysis of the way the market moves. This is something that used to be incredibly difficult to do without massive computing power. Today, the same AI can run in cloud ecosystems like AWS and GCP.

 

With the market fully understood, AI can help traders in so many ways. AI, for instance, can be used to expand the way it analyzes market sentiment by taking into account social media posts, conversations on online forums, and other sources of information.

 

Automated Trading with AI

 

All of these advancements lead to one outcome: the implementation of AI to automate trading. AI trading signals are not only more accurate and reliable, but also easier to access. At the very least, you don’t have to invest in building your own data warehouse to take advantage of AI.

 

AI can analyze the market and recommend positions through signals. Thanks to its vast coverage, the signals generated by AI point you towards the best trading opportunities on the market. It is up to you, the trader, to decide whether to capitalize on those opportunities.

 

There is no doubt that artificial intelligence will continue to change the financial markets and how we approach investing in financial instruments. From the way AI is being used in modern trading, it is not difficult to imagine the great new features being introduced in the future.