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The Advantages of AI Technologies in Financial Trading

Oct 20, 2021
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Artificial Intelligence in finance is transforming the way we interact with money. Providing a faster, more convenient, and  safer way to access, spend, save, and invest. But it’s not just in traditional financial settings that AI is being utilized. 

Many traders are turning to AI technologies like the MT4 platform to help them with their financial trading too. 

How is AI used in financial trading?

As more and more traders turn their backs on the traditional stock market for their investments and turn increasingly to the foreign exchange or forex market, we’re seeing AI transform the sector. 

AI applications can be used in a number of ways, including algorithmic trading, portfolio composition and optimisation, model validation, back testing, robo-advising, virtual customer assistants markets impact analysis, regulatory compliance and stress testing, to name a few. 

Thanks to AI’s ability to digest and analyse huge volumes of data faster than any human, as well as recognise any trade anomalies, traders are cashing in on this technology. 

Andrew Ng said “AI is the ‘new electricity’….just as electricity transformed many industries roughly one hundred years ago; AI will also now change every major industry.” 

The advantages of AI technology

It’s fair to say that AI is revolutionising forex trading, thanks to numerous advantages including:

Predicting with accuracy

In 2019 Triennial Central Bank found that the forex market was trading with a daily volume of $6.6 trillion. With so much money at stake, AI-led technologies are being utilised to reduce trader risk and increase accuracy. 

These innovative technologies enable traders to analyse large volumes of data easily allowing traders to execute transactions with a lower risk of failure. In part thanks to being able to constantly track their performance in real time. Helping traders in the long-term to make informed decisions. 

All the tools they need

Not only does AI technology help predict trades and markets, but it also helps traders quickly and easily identify red flags – at the touch of a button. 

AI predictive platforms also shows traders not only what data to collect, but how to collect it. Helping them gain a better understanding of the market, these tools can teach traders how to decide which data is relevant, and, more importantly, how to use the data they collected to make informed decisions. 

Additionally, the algorithms the AI platforms use are particularly useful at times of high volatility when there is a high chance a trade can go wrong, helping traders to minimise their losses during unfavourable times. 

Convenience

Traditional trading meant that traders and brokers alike were working long, unhealthy, and often unsociable hours. With the constant stress leading many to suffer burnout, however with the emergence of AI-led platforms, a trader is able to save a lot of time without compromising on trading quality. 

By giving traders all the tools and information they need within a matter of minutes, if not seconds, and enabling traders to make better decisions, they’re able to make informed trades and better understand external influence, strategies, speed and computational power – in short, giving traders complete peace of mind. 

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