Trading has moved with technology to the point where a larger proportion of people than ever before are trading on their smartphones by using a trading app. Sixty-one million US citizens — over 20 percent of both women and men — have income from investment accounts and are involved in online share trading. This number has risen steadily, and each new development in technology that has made it easier to trade has impacted the figure, resulting in an increase in those who trade. The internet boom opened up online trading for the masses, and prospective traders are looking to the next advances in technology to see what the next logical step in the trading industry may be.
Will Artificial Intelligence Be the Next Big Trading Boom?
Artificial intelligence is what many people think of when they picture the future. Automated robotics will do tasks that would be time-consuming, allowing us to work on other things. Indeed, trading involves anticipating the market by using analysis and models of how it reacted previously. While there are numerous ways of doing this on trading apps, AI could streamline the process and provide a stress-tested model of what we should trade and when. By using algorithmic trading, which trades based on a programmed set of rules, with AI trading, which uses machine learning to anticipate what may happen in the future, we could have created the perfect trading bots.
AI Trading Is Already in Place
At the moment, high-frequency automated trades are already in place for trading with AI. This takes away some of the legwork from human traders who can focus on matters that might be more qualitative than quantitative, e.g., factors that can't be predicated by figures such as geopolitical issues.
Goldman Sachs is cutting its traders and hiring tech staff to bring in an automated trading system, Marquee to London. The move, Goldman Sachs urged, won't impact on those who are good at selling but may highlight those who are hiding behind admin tasks and not pulling their weight with trading. Indeed, in 2000, the company had 600 cash equity traders compared to the two it has today. By giving AI simple tasks, traders can focus on the more important issues, namely, to work out which tech boom might benefit the company next. Focusing on the future of trading is important and why some firms lost out in the last big tech boom— the internet and its online trading platform. Keeping eyes ahead to what could next benefit the industry is the strategy that many trading houses will adopt.
While some traders may be concerned that the industry will be shaken up, there is nothing to fear — and a lot to embrace. AI will soak up some of the easier trades that require more legwork than logical thinking, which gives traders time to focus on the big moneymaking trades while knowing their income is safe in the hands of the AI. While machine learning has a margin of error, it is no bigger than that of human error, which could be equally as costly for a busy trader. At least with AI, the trader will have more time to be careful with the more important trades, limiting the margin for their own error.
* This is a contributed article and this content does not necessarily represent the views of techtimes.com
