Did you know that around 20 million people began trading stocks during the pandemic? Many amateur traders have since found that it’s not as easy as they thought it would be.
But using AI trading software can help novice traders thrive even if they have limited experience. Have you considered trying an AI trading platform but aren’t sure if it’s worth it?
The following guide will explore what using AI for trading involves and why it’s beneficial. Read on and discover if bot trading is the right strategy for you.
What is AI trading?
AI trading is a type of trading that involves the use of artificial intelligence to make investment decisions for the user. Examples include actions like detecting investment opportunities and automatically placing orders.
It’s important to note that many traders apply their own pre-programmed rules instead of letting AI make every decision. It’s developing technology with a lot of room for future advancement.
What is Algo Trading?
Algo trading involves buying or trading using rules based on past data. The rules reference things like charts, indicators, and technical analysis.
For example, you might want to buy a certain stock but think the price will go down for three days before it goes up. You could then create an algorithm to set a buy order at what you think the lowest price to be.
You can review this helpful article for more information about Algo trading and decide if it’s right for you.
High-Frequency Trading
High-frequency Trading is a type of algorithmic trading growing in popularity. It involves selling and buying large amounts of stocks and shares very quickly.
The process produces high liquidity that helps reduce the consequences of market fragmentation. It also helps with price discovery and formation because of the vast orders.
The Biggest Benefits of AI Trading
AI trading greatly reduces the time that investors need to spend researching. Traders can use AI to direct billions of instructions, complete graphs, find opportunities, and interpret stock data.
Using AI also takes the emotion out of trading stocks to produce better results. It only operates on reason and pre-built algorithms. The emotionless technique often helps make better trading decisions because it’s data-based.
You can also combine AI trading with other useful technologies because it’s very adaptive. For example, adding it to blockchain technology and big data creates a more detailed analysis.
Finally, using AI can reduce your overall cost because most of the work becomes fully automated. You can even expect the cost of your research to go down when you use AI software.
AI reduces paperwork because it can handle all of your reports. The software makes outstanding reports and customized charts all on its own. The detailed reports get updated in real-time and you can view them on multiple devices.
Ready for AI Trading?
Now you know what AI trading is, how it works, and why it can benefit investors. No matter your experience level, consider trying AI software to improve your trading decisions and strengthen your portfolio.
Check out our business, tech, and finance categories for more helpful tips.
