While it may take some time until we see them reaching widespread adoption, disruptive technologies like Artificial Intelligence and blockchain have been shown to be game-changer for many industries. Trading isn’t an exception.
Almost half a century ago people realized the capabilities of machines much outperform those of people in most aspects in regards to trading. Indeed, advanced trading technologies and algorithmic trading have existed for a long time and have been developing ever since their inception. Today, more than 90% of orders around the forex market are performed by algorithms.
Quite lately, AI made its way into the trading landscape, leading to immediate attention gained by big players in the business. Theoretically, the potential provided by AI and AML technologies in quantitative analysis is infinite, which has prompted many organizations to start diving deep into the topic and coming with innovative solutions that weren’t thinkable merely a decade ago.
Are there any current constraints of AI in trading? The solution is yes and is chiefly because of one factor – information. While the availability of information and our ability to process it has risen dramatically, there’s still a great deal of room for improvement. For an AI to be dependable, it ought to experience an enormous quantity of information 24/7.
In the following guide, we will have a look at 5 of the most widespread use cases of AI in trading today and in the foreseeable future.
Deep quantitative analysis and forecast
When combined with big data technologies, an AI can scan multiple databases concurrently, keep track of tens of thousands of factors and metrics and instantly design risk assessment conclusions, price predictions, pattern recognition and many more.
Personalized trading tips
Going beyond the purely quantitative evaluation of AI, after the information has been processed and evaluated, a so-called Robo adviser can design portfolio modification strategies and suggestions separately for every investor. This means that the AI will analyze the profile of each investor (is he a risk-taker, just how has he performed previously, just how much are his choices affected by feelings and a lot more) and propose specific activities that are targeted at optimizing his profits. This finally contributes to your personal broker that tells you when to push the button and if not.
Dohrnii brings AI into crypto trading
A recently declared blockchain initiative from the Swiss non-profit organization Dohrnii Foundation could end up being a trendsetter for crypto trading in the future. Dohrnii and their group of fintech and trading specialists have been working on a solution for its cryptocurrency marketplace for years.
Designing a trustworthy system of AI functioning in conjunction isn’t simple. A whole lot of backtracking and constant testing of historic patterns is necessary to be certain that the AI is optimized over time. Dohrnii unites a complex pair of AI modules that assist crypto traders achieve better outcomes by supplying them with innovative quantitative analysis and a high amount of trade automation. Five distinct AIs analyze the cryptocurrency markets by taking into consideration a great number of cost changing factors such as macroeconomic, political and sociological aspects known to have a correlation to the cost of cryptocurrencies. All these AIs are constantly running simulation cases to test and perfect that the reliability of their models.
When the information has been processed, the data gathered is then conveyed to the dealers in the shape of suggestions, cost predictions and many other trading signs. From there, a Robo adviser designs portfolio alterations based on the particular profile of each dealer. Users can set automated orders that are implemented through third-party exchanges.
Another significant feature of this Dohrnii project that transforms it in a investment ecosystem is its crypto trading academy. Both beginner and experienced traders are appraised at the registration and during their interaction with this stage. Dohrnii then automatically suggests a personalized training program composed of the a variety of lesson formats available.
The Dohrnii token (DHN) can also be earned by completing lessons in the trading academy – successfully answering all questions at the end of a learning cycle yields absolutely free DHN to the consumer depending on the difficulty and duration of this module.
Tech is the way ahead of the trading sector
Projects like Dohrnii are possibly setting the rate for the entire business to follow by becoming leaders at the tech-driven future of investing and trading.