How will AI help democratise intelligence in algorithmic trading? Here are 5 ways
capital markets, AI is revolutionising the way trading operates. Algo trading, also known as algorithmic trading, can and will harness the power of artificial intelligence to automate the trade execution process, as well deciding what and how to trade, fully.
The use of AI in algo trading extends beyond mere automation. It will leverage AI's analytical capabilities to study and interpret market data and related patterns from the exchanges, and execute trades based on the insights gained and opportunities spotted.
Also Read: Stock Market: How sentiment analysis transforms algorithmic trading strategies AI has played a significant role in making algorithmic trading more accessible to the masses.
The emergence of open AI sources like ChatGPT, and open source AI models like Llama 3 has made AI technology available to anyone with an internet connection at a mere $20 a month or so cost. This has led traders to gain access to algorithms, creation of algorithms, that were previously only available to large institutions.
Additionally, many platforms have made it possible for traders to automate their trades without requiring coding knowledge, thanks to the contribution of AI in algo trading. Traders only need to apply their logic, in conversational format (without knowing any coding whatsoever), choose appropriate strategies like strangle, straddle, butterfly spread, etc., based on market conditions, and then automate their trades based on their set parameters.
With these algorithms in place, human intervention is no longer necessary, and multiple trades can be executed simultaneously. The significant benefit of AI in algo trading is that traders of all levels now have access to modern and advanced tools, improving their cost
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