How Can AI Trading Technology Help Investors Make Better Decisions?

The trading and fintech landscape has witnessed advancements in the past few years that were beyond imagination some time back.  AI and ML have played pivotal roles in this progress.  The consistency of artificial intelligence is turning out to be crucial in every sector. AI has consistently been used in the easiest ways by professionals across sectors. From turning on our phones through facial recognition to taking 3D photographs, we see the role of AI everywhere.

AI can also be used for more complex purposes like in investments, which means investing in the stock market. So what is AI trading? It’s the use of artificial intelligence technologies and the historical data of financial markets to analyze large stock data. It enables you to:

• Mitigate risks
• Predict stock trades
• Efficiently achieve higher returns
• Indicate better trading opportunities

AI is reimagining the business world by boosting innovation and productivity. You can use artificial intelligence to improve products, processes, and decision-making. With the AI trading technologies, you should be able to achieve organizational agility powered by AI.

How AI Trading Technology Contributes to Better Decision-Making

Do you intend to grow your investments but are worried about the highs and lows of the market? Are you tired of watching your money disappear when the market is down? Is it that you don’t even know how to react when the market is back up?

A lot of investors in the stock market are always looking for ways of making trading easier. The sheer vastness of the market, however, can be intimidating. Many of the investors would like to trade stocks without the constant monitoring of the market by themselves.

They are always hearing about how AI technology helps people in doing everything. And it’s true that AI is increasingly becoming part of our lives. So how can AI trading technology help investors in making better decisions? 

1. Increased Access to Investments

Utilizing algorithmic trading helps you to gain more investment prowess. The problem is that investors don’t have access to machine learning algorithm. 

Fortunately for them, AI-backed robo advisors such as Q.ai are here to help them take advantage of machine learning. AI trading platforms rely on complex algorithmic trading strategies for their expertise. As the complexity of the trading platforms grow, so will the demand for AI tools that help investors better.  The AI-enabled trading platform also depend on their data crunching abilities to make investment decisions and trade securities. These benefits are then passed on to investors in the form of personalized portfolios, including passive investment opportunities. 

Trading platform software also provides automated financial advice to investors. This is done based on brief sign-up surveys. By using information such as a person’s age, risk tolerance, and financial situations, AI-backed advisors are able to provide tailored financial recommendations. 

Robo advisors can also provide several perks that human based financial advisors can’t. They are, for instance, cheaper compared to human advisors. A lot of them only need a smaller initial investment compared to large asset management firms. 

Additionally, robo-advisors allow 24/7 access to your accounts. This side steps the need for office hours and holidays off. Also, automated investment services like robo advisors don’t need an oversight that’s required with a manned portfolio. 

2. Algorithmic Trading Opportunities

The amount of data that traders need to make informed decisions is astronomical. There is a limit to what information can be processed by the human brain and this limitation is mitigated by AI. Algorithmic trading, however, can boost an investor’s access to quality market insights.

Like its name, algorithmic trading uses complex algorithms to make investment decisions. But unlike humans, these machine learning algorithms can process large amounts of data almost instantly.

Remember that these algorithms can also learn from their data and as such, they’re able to make informed and efficient suggestions. 

Investors can also take advantage of the trading analysis software to analyze historical and current market data. It enables them to find profitable investments. They can also use algorithmic insights to recommend investments or execute traders automatically. 

3. Uncovering Patterns

Stock trading software differs in strength and application. This, however, depends on whether a trader is making use of the software or an investment firm. In case of the latter and due the fact that advanced and expensive software can be ascertained, powerful computers can practically crunch through endless data points in a matter of minutes. 

Automated trading software can pick on historical and duplicating patterns that a person can rarely spot. The human brain is simply no match for the amount of processing that AI technology is capable of. 

Trading software for stocks can, for instance, access thousands of stocks in moments. Some hedge funds have been known to capitalize on AI’s machine learning ability. This technology can analyze up to 300 million data points on the New York stock exchange in the first hour of daily trading.

This means that investors can partake in trading on FTSE 100 and 500 market indexes. These are essentially UK and US investment portfolios. AI trading analysis software can allow for an in-depth analysis of the two markets and at the same time. 

4. Untapped Investment Opportunities

ML algorithms don’t look for linear relationships in data. Meaning that they never stop analyzing data when a straight-line “cause and effect” relationship is clear. This leads them to finding investments that the market has either overvalued or undervalued.

Thanks to their ability to identify new relationships, ML models are the best tools in identifying investment opportunities. Investors can take advantage of this potential to gather market insights. Then make novel investments based on factors such as risk tolerance and financial situations. 

5. The Potential for Greater Returns

One thing you must note is that there are no guarantees in investing. Not even when you’re using artificial intelligence. But if you’re to look at all the benefits presented so far, it’s clear that ML/AI in investing can lead to greater returns.

After all, machines can crunch real-time data much faster compared to humans. They can also use this information to spit out insights and make trading decisions. As these models learn from new data, they’re also likely to minimize the number of mistakes they make. If you add these factors together, it’s safe to say that ML can lead to better portfolio outcomes.

Conclusion

There’s no doubt that the stock market is unpredictable. As such, there’s no sureshot formula that can be used to calculate variables and outcomes. Even with the help of AI, you can’t predict all the prevailing uncertainties.

That’s not to say that automated trading platforms aren’t the final solution. You must, however, note that these technologies keep advancing. So there’s no stagnation because artificial intelligence continues learning from its mistakes. Through the regular rollout of trading assistants, these programs can absorb big data.