Artificial intelligence will change Forex and Stock market, it is an inevitable future that lays ahead of us. The large institutions are tapping into AI and plans to utilize this tool as soon as in 2017. What can traders expect from AI?
26 October, AtoZForex - Since 1950, software engineers have put in tremendous amount of work to innovative and program man-made brainpower software. Until now, it has been fruitful and led to various leading man-made brainpower software that supports our day-to-day lives. To name a few of these helpful software, presently the frameworks are inbuilt on every mobile device with "Siri" by Apple Inc. "Cortana" by Microsoft and "Google Now" by Google Inc. Yet, how do these software aid the traders on the Forex or stock market?
FINRA plans to test and create man-made brainpower in 2017, while Nasdaq Inc. (NDAQ.O) and London Stock Exchange Group (LSE.L) expect to utilize this tool by the end of the next year.
How artificial intelligence will change Forex or stock market?
Artificial Intelligence (AI) programming has been developed to such an extent that it is already present on the securities exchange and Forex market. In forms of tools that recognizes exchanging designs, stock-picking and buy/sell markers. Moreover, there are start-up companies that are already using AI for algorithms trading strategies, such as Binatix Machine Intelligence, Aidyia, Walnut Algorithms, Alpaca, Clone Algo or Sentient.
However, Wall Street watchdogs and exchange operators are also seeing potential for utilizing AI for market oversight. Bill Nosal, a Nasdaq business development executive, who is overseeing its artificial intelligence effort commented: "We haven't really let the machines loose, as it were, on the surveillance side." These institutions hope that AI can help catching the misbehavior of wrongdoers more quickly than the current system.
No more cheating on the market? AI to sweep all misbehaviour?
The Wall Street watchdogs could develop an AI software that can monitor the scrub chat-room messages, while detect back slapping or bragging around big trades as well as other dubious activities. The AI software could also unravel complex issues, one of which is "layering". A practice that involves orders being quickly sent to exchanges after which they are canceled, with the aim to move stock prices artificially. Tom Gira, an executive vice president of FINRA, even mentioned that AI could sniff out new types of scams or fraud:
"The biggest concern we have is that there is some manipulative scheme that we are not even aware of. It seems like these tools have the potential to give us a better window into the market for those types of scenarios."
Who are the pioneers of the AI revolution?
Fundamentally, three Technology Giants are performing well and making improvements in the artificial intelligence field - Apple, Microsoft and Google Inc. Google is outperforming two other Tech Giants, as it is adding continuous updates to its “Google Now”. The AI from Google is able to sync almost everything, including the weather forecast, sports scores, traffic, now cards etc.
Microsoft is also keeping up the race by updating its Cortana persistently, where Apple is presenting the new versions of the IOS for IPhone, which are coming with the updates, AI Siri.
Is it wise to invest in these tech giants? Currently, Alphabet Inc. (NASDAQ:GOOGL) is trading at 835.74 +11.68 (1.42%), Microsoft Corporation (NASDAQ:MSFT) at 61.00 +1.34 (2.25%) and Apple Inc. (NASDAQ:AAPL) at 117.65 0.00 (0.00%) on October 25, 2016.
About the author
The article was written by Amandeep Sonewane, an equity trader with four years of experience in the market. If you have questions about AI for Amandeep, please leave a comment in the section below.