AI and Automation In Trading

We’re seeing the rise of automation in all walks of life – our cars are evolving with self-driving features, our mobile devices are becoming smarter, and our desktop and laptops are being filled with a barrage of software to make our day to day easier. As we continue to develop and evolve methods of work, automation becomes all that more important too – for example, factories that make cars are under demand to push out more and more units per year, and the only way to meet that demand is to operate in a 24/7 capacity in which there is no downtime. This also extends in to areas in which information is changing very quickly – in market trading the flow of information is so important, and small changes in that information can cause big changes to the markets and this is where we see a big rise in the use of AI and automation in trading – in this example, in the form of robots.

Automated robots in this setting aren’t anything new – they’ve been used by search engines for years to crawl through websites and pull data to help users find and sort information better – in trading they’re used in a similar fashion, they scan all the information available to them and make trading decisions based on the information returned to them.

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Robots have come a long way since they were introduced to trading in 2008, and some of the best Forex robots on the market continue to improve at a staggering rate. From initiating trades, to managing positions and generating signals from master to slave accounts – AI is becoming paramount in the assistance of traders achieving both short and long term gains in the Forex market. Some traders will love them, others will loathe them – and as with any AI related infrastructure, there are pros and cons to their use.

Pro – The biggest benefit to automated trading robots is just the amount of data they’re able to process – they’re able to navigate millions of sheets of data in seconds and collate all the information in seconds, and they’re able to do it without pause. As they’re able to gather all this information day and night without stopping, the amount of trading they’re able to conduct at the same time is also something that can’t be overlooked as it is something that couldn’t be done in a manual setting.

Con – With the benefit of being able to pull all of that information so quickly, however, comes the drawback – there’s no distinguishing between whether or not the information it is receiving is good information. If the robots are left to automatically handle all trades based on the information they pull, they may hit some luck and find huge value, but they’re just as likely to rely on the bad information and lose a lot at the same time. 

It’s always important to remember that if the automated robots were perfect and they could just be set loose and left to do the work, then traders would never have to go to work – a good medium needs to be found in which as a trader you work alongside the robot. Markets are driven by confidence, and that’s not a measure a robot can determine so a lot of hands on is still required to measure the observations and research. Many uses of robots currently are for scalping in forex markets – setting very strict budgets so that any potential losses are small but capitalising on any potential gain too.

Over time these robots will get smarter, however – those who develop the robots will be raking in the money as traders look for ways to up their game and to find the best possible ways to increase their gains and as they continue to make a better living and increase their own profits, they’ll continue to perfect the software that goes in to the robot as they begin to filter out the bad information that they receive, and learn what they need to look out for when trading. AI programs are improving very quickly, and it’s not a far cry to suggest that within a few years many traders could turn to AI robots to handle the majority of the trading they handle – and perhaps all that’s left to do is work out the final teething issues until they’re in a position to make the smarter choices required for high paced, and high end forex trading.

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