Trading today is certainly not what it used to be. And it has evolved! One of the reasons for this evolution is that new technologies are constantly advancing the field.
And now we hear more and more about artificial intelligence, machine learning, de trading robots etc… in the world of trading.
Today, we are going to show you that even if the trading profession is psychologically strong and that at first glance artificial intelligence does not fit in, it is still destined in the future to surpass the human.
What is automatic trading ?
Automated trading is simply the execution of orders by an autonomous computer program. Simply put, automated trading largely takes the place of the trader. It analyzes the markets, executes the trades and even stops when the risk is high.
Due to the fact that the robot feels absolutely no emotion and is completely devoid of any natural psychological element, this allows it to increase the speed of execution of orders and even significantly increase profits. This is very beneficial for the trader who decides to adopt it.
Attention, it is necessary to make the dissociation between a trading robot and an artificial intelligence that « thinks » and makes decisions alone, similar to a human, which the robot does not do.
However, it should be noted that finding an automated software requires a lot of time and research so that it is best suited to your needs.
A robot for a psychologically strong job ?
As we know, trading is a time-consuming and psychologically intense business. So we wonder why and how a robot would compete with the human trader? It’s true, a robot and a human have nothing to do with each other. Is it possible that artificial intelligence can take the place of a human being when AI is devoid of all this strong psychological aspect.
So note that a trading robot and artificial intelligence now account for between 60 and 80% of market transactions. The fact that they are totally devoid of feeling is a real advantage for the trader because often, due to the difficulty of this trade, the human trader can often lack the mental side. The robot doesn’t feel fatigue, which means it can trade morning and night without interruption.
The trading robot is faster and more accurate, which allows it to better evaluate opportunities in the stock market and act at the right time while managing the risks accurately.
It should also be noted that when trading, it is never either black or white, an arbitrage is necessary and this is where we realize that there will always be a need for a human being to pilot the strategy. Robots and human traders go hand in hand.
Let’s add to this that human beings are intuitive and full of sense. A human being is able to « feel » when it’s the right time to act while an AI, which is formatted and therefore rather methodical, can hardly predict a good move if it has not been programmed in advance. Nevertheless, there are some technological advances such as Reinforcement which allows to get closer to human intuition based on probabilistic calculations.
In conclusion ...
There is no doubt, artificial trading intelligences will one day, years and years from now surpass humans.
The technology is constantly evolving and proving itself. Nevertheless, the success of artificial intelligence can only be great and glorious if it is conducted in harmony with human capabilities.
Certainly, AI is effective in detecting highly profitable situations or scenarios. But it will miss information that greatly influences market prices in times of crisis such as the Coronavirus for example.
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