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AI Stock Trading: A Distant Dream or an Attainable Reality?

By CIOReview | Wednesday, July 3, 2019

AI-powered tools have already become an integral part of stock market trends. What is in store?

FREMONT, CA: Artificial intelligence (AI) has been contributing to the stock trading industry for some time now.  But are the recent trends with respect to AI-based automation in the stock market highly indicative of a complete takeover?

So far, no AI-based tool has been able to surpass human intelligence in predicting stock trends. Yet, several key industry players seem to believe this is achievable shortly.

For example, Epoque, a company based in Switzerland, employs a totally automated AI tool with 3 engines for trading. One engine analyses and keeps track of prospective trades, the second creates orders and carries out operational actions. The third engine manages the current orders.

With AI, the need for spending hours on analysing data or numbers is eliminated. Instead, AI-tools learn from their own experience, analyze vast chunks of data, and arrive at pro-active conclusions and implement solutions at real-time speeds.

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According to a KPMG report, in 2018, the AI sector received about $12.4 billion in investments, which is expected to reach about $232 billion by mid-2020s.

Algorithmic stock trading backed by high-end analytics has become common today. It is because traders would like to identify rogue transactions or be aware of or receive continuous updates on latest stock trends. For instance, AI/ML platforms are increasingly being utilized in stock markets to analyze operational risk elements.

So, what we can expect in the coming years? Fundamental changes such as faster, more detailed and precise trading through AI are certain as far as the stock market is concerned. There have been considerable changes in terms of analyzing data, learning stock trends, predicting investment patterns, or communicating the analysis in real time through numerous e-mails.

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Yet, when it comes to a complete takeover, it depends on whether AI tools can do what only humans are capable of; assessing emotions and sentiments while analyzing a situation and predicting results.