Over the past couple of decades, stock trading has experienced several waves of transformation:
- The development of digital infrastructure made stock trading accessible to everyone. The ability to connect to trading at any time and from any device democratized this type of activity and attracted a number of new traders.
- Artificial intelligence stocks trading was the second fundamental transformation, which allowed everyone to benefit from trading, even those who do not have professional knowledge in finance and economics. AI bots eliminated the need for traders to spend many hours in front of a computer, monitoring stock price movements. Thus, an AI bot became a reliable tool for receiving passive income from trading.
Factors that Influence the Success of Your Trading on the Stock Market
Stock trading profitability depends on many factors that influence the final result:
- Trader’s knowledge, experience, and aspiration to improve trading skills
- Willingness to devote much time to market, analytics, and stock market news monitoring;
- The speed of decision-making;
- The ability to resist emotions when making decisions;
- The ability to learn from the experience of other traders and own mistakes.
Thus, the ideal trader is a person who is completely immersed in this type of activity. Additionally, they devote much time to trading, know how to distance themselves from emotions, and never get tired. In reality, finding such a person is difficult, maybe even impossible. This is why a manual trader’s profit is not as high as they want. This is one of the factors why many beginners soon abandon trading and prefer activities that are less demanding. However, the advent of AI bots has changed everything since they embody all those ideal traits that a person lacks.
How AI Trading Bot Compensates for the Weaknesses of the Human Mind
The latest generation of AI bots shows high efficiency and productivity in many areas of human activity, and trading is no exception. The bots copy human logic, and at the same time, they have all those qualities that an ordinary person often lacks:
- AI bots don’t know what fatigue is and can concentrate on trading for an infinitely long time. After several hours of hard work, a person may begin to make mistakes due to brain overstrain. However, the trading bot may continue to work with the same diligence for endless hours.
- AI bots have deep knowledge of various sciences, including economics, finance, and trading. Therefore, they rely on the most effective and scientifically-based trading strategies.
- Artificial Intelligence can process numerous sources of data simultaneously. Therefore, the bot does not make a decision based on the first analytical report it comes across or a superficial glance at statistics. Instead, it considers many relevant factors.
- The decision-making speed of trading bots is much higher than that of a human. Therefore, if you want to engage in scalping, then the help of an AI bot is a must.
- AI bots do not have emotions, so when making decisions, they are guided by the data they have.
Why Is It Important to Use Artificial Intelligence Technologies in Trading?
The emergence of new technologies always increases labor productivity, but only for those who use these technologies. Traders have already realized this after simple trading bots have been actively introduced into stock trading since the early 2000s. Traders who integrated them as advisors saw significant gains in profitability.
However, today, this method of automating trading is already outdated since the invention of artificial intelligence had a significant impact on the market. Traditional bots can no longer compete with AI bots, and therefore, instead of guaranteeing high profitability, they hinder growth opportunities for their users. The use of AI is becoming the main trend in the market. Therefore, if you want to compete with other traders on equal terms, you should choose an AI bot with high efficiency for day trading. For example, the trade success rate of AI bots from AlgosOne is over 80%. This is much higher than the market average, and therefore, such AI assistants will give you undeniable advantages.
Features of AI-Based Trading Bots
How exactly can AI bots help a trader in their routine work? The capabilities of a particular bot depend on what tasks the developers set for it. This is why there are many options for AI trading bots on the market. Some of them are versatile, and both beginners and more advanced traders can use them. Others will be more useful to professionals due to their wider range of capabilities and more complex settings. But in general, AI bots are able to perform the following tasks:
- Risk management. Traditionally, traders use regression models to assess risks, but AI is also capable of analyzing nonlinear relationships, thus making the risk picture more comprehensive.
- Algorithmic trading. The AI bot is capable of executing orders in accordance with established algorithms. It analyzes large datasets at high speed to make decisions.
- Portfolio optimization./Management : AI will suggest the best option for diversifying your portfolio. It will consider your investment goals, possible risks, legal restrictions, etc.
- Sentiment analysis. Market sentiment is an important factor that influences stock price fluctuations. AI analyzes social media posts, expert blogs, news articles, and other relevant sources to predict changes in the mood of traders and investors.
Conclusion
The big advantage of artificial intelligence is its ability to act independently, which means you won’t have to constantly reconfigure the bot due to changing conditions. It is capable of learning based on the information it receives. Moreover, an AI bot has creative abilities, which means it is able to invent new trading strategies. In addition, it can test them independently, and if it finds any shortcomings, it will immediately correct them. All these features make AI bots your ideal day trading assistants. Moreover, the more they develop, the less traders’ participation they will need.
