Artificial Intelligence and Trading: What’s Next?

by | Mar 22, 2019 | Stock Market News Featured

Computing has had a hand in shaping what is now a data driven financial climate making it faster now than ever before to conduct transactions. And now, another revolution is bound to occur led by artificial intelligence.

Today’s computing industry has been fast-tracked to meet the ambitions of consumers. This led to the inception of computers that almost quadruples computing times every decade and software that can now solve the most complex of mathematical solutions. The evidence of this is undeniable from the quantum computers being tested by huge tech companies to your smartphones that now has more processing power than NASA ever hoped for in the 60s. In the financial world, many forecasting tools that allows for market analysis and trading software has ruled daily transactions. This is an obvious iteration of the financial market given how the industry operates. Every second in this world could be worth a few millions of dollars thus presenting computer scientists a perfect avenue to hone their craft under such intense pressure. And now, they turn to artificial intelligence as financial managers try to gain an advantage. In this article, we talk about how artificial impacts the world of trading.

Finance and Data

Finance is a data miner’s dream as it is an industry built upon billions of individual datum ready to be processed everyday. Machine learning or how computers sharpen their intuition feeds of these monstrous data numbers to be able to create more accurate forecasts and thus more reliable decisions. And they do this at blazingly fast speeds that allows financial institutions and individual players to simply sit back and relax as their computers crunch the numbers.

Statisticians were the first to notice a possible application of artificial intelligence in the financial market. As the first mathematically inclined practitioners in the market, they were the ones who realized an opportunity to make use of computers to do functions that they would normally have done by hand. They observed then theorized that if a computer solution or algorithm could be modelled well enough, they could create systems that would allow individuals to rely on computers to do their risky decisions for them through a scientifically backed method. They thought then that they might have struck a gold mine, in the middle of all the billions worth of assets that are being traded everyday, and they were right.

How Fast is Fast Enough

Speed is the name of the game when it comes to trading in today’s world where competition are always ready to pounce on the same opportunities that you are looking at. Speed comes in two facets, one in the way the automation that computing affords and two the speed of doing the transactions itself. The first one is the creation of software systems that enable the automation of routine activities that would otherwise be impossibly tedious if done manually. The second one is possible because of the inception of the internet and all the protocols that was invented then after. A successful trading software will have to be able to harness both speeds to be able to create a fully functioning and dependable decision support system. Artificial intelligence belongs to the first one.

It is no surprise as most billionaire CEOs who made a living trading assets in the financial markets that automations in trading allowed for the gain of incredible amounts in as early as the 90s when financial computing was still at its infancy. And today, backed by further improvements in technology and computer science, trading software can be tasked into doing more than what they have been envisioned to before.

At the moment, however, the big financial companies holds the most advanced researches in the field. This is because there only so few bodies who can both afford top computer scientists and have access to data that would allow artificial intelligence to learn enough to make impactful decisions. Furthermore, market patterns can only be observed through prolonged exposure that only through big financial firms can provide.

Nowadays, due to knowledge exchange revolution brought upon by the same speed that built the internet, everyone is able to model their own financial software systems to be able to independently create their own schemes. This deviates sharply from a time when only hedge funds and mega-banks have access to such devices.

What will Change Now?

The change that has already begun from the onset of computing is catching the companies of the world like wildfire. These firms are setting up their own research teams to be able to get a piece of the artificial intelligence driven financial pie. There is a push that is quite visible as the world now turns more to data-driven decisions and less from unreliable human intuition and even experience.

But perhaps, most of the impact will be felt by the job sector. Artificial intelligence is said to be set to replace almost half of the existing jobs and this does not exclude the jobs of financial managers. These managers who make a living by being the middle men in monumental transactions almost always charge to the bone. They offer expertise in key decision making that made them invaluable components in transferring huge sums of assets. Now, in order to stay relevant, they have to up their game by highlighting their trained financial mind through software that they will then offer.

Another change will be the extension of trading to normal people who have limited resources. Back then, trading had always been an endeavor only fit for kings of the financial world. Now, many companies are offering services to be able to use their own artificial intelligence backed software systems at low costs.


The financial market is a living and breathing thing and artificial intelligence is simply the next phase in its growth. In the foreseeable future we should be looking at a more data-driven, automated, and open market for everyone. And the best we can do to prepare is to educate ourselves.

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