How Ai will Fuel the Future of Trading — And Stabilize the Crypto Markets
The basic steps of trading have always been the same: pick a diverse portfolio of assets to mitigate risk. Buy low. Pay attention to compound interest. Give buy and sell orders at price points that make sense for your goals and risk-tolerance. Sell high.
This predictability makes trading assets a no-brainer good-fit.
Hedge Funds Already Use Ai
Traditional markets have already caught on and have been deploying Ai for their own benefit for years. Fifty-eight percent of hedge funds say they’ve been using Ai to make trade predictions or offer advice (if not make trades automatically) for the last three years.
That number is rising. Almost 70% say they are currently using it to generate trading strategies.
A quarter of hedge funds use Ai to make the trades on their behalf, turning over the job of quickly executing on advice.
Ai hasn’t always been a smooth path toward reliable profit, however. According to Investopedia, a spring 2018 market correction meant traditionally reliable Ai indicators were overturned and Ai trades performed poorly. “Hedge funds that use Ai just had their worst month ever,” announced Bloomberg. Ai, the authors said, was partly responsible as it optimized its trade strategies for a bull market with consistent growth. It had not learned what to do when the trends changed, presenting the Ai with unknown variables and confusing metrics.
What happened in February and March? Well, Ai had never seen a sell-off in the two years of market data it was analysing to make its decisions. Then a sell-off happened. It’s these “never conceived” events that Ai cannot analyse — they’re simply not in the data it has available. It’s like Ai had been learning a chess game without knowing the rule of castling. It had never seen it, and therefore couldn’t incorporate it into the strategy. Ai is blind-sided when it doesn’t have data.
Humans can only juggle so much data, but for Ai, data means extra analysis, strategy, and the ability to interpret. Seeing all the moves before allows Ai to predict the conditions under which we see them again. And the more often we see them, the better Ai will get.
In fact, it’s gotten so good that in the midst of the sell-off, Reutersreported that commodities traders were leaving the market because superior computerized trading was fundamentally altering the market and making it too hard to spot new opportunities.
An oil trader is quoted in that article saying that the commodities market’s volatility came from “non-traditional investors and algorithmic trading.” Yet hedge managers argue injecting liquidity into their markets means more stability, not less.
Crypto Deserves Ai Tools
Crypto can benefit from Ai in the same way that traditional hedge funds have. However, the impact of Ai in crypto may be even greater given the traditional markets close. Sleep is a given. However, no one can monitor their crypto trade accounts 24/7 without the help of agency teams around the globe or automation.
The crypto market is more volatile than other markets — market cap is growing exponentially, but many coins still have low caps that allow great movement in prices and quick changes. Increasing liquidity by putting more traders in the driver’s seat, increasing participation, and offering correct information and the best strategies to all should stabilize the market, something that helps all traders and the markets themselves.
In the market today, information is rampant. It’s having bad information, or failing to interpret it correctly, that lands traders in hot water.
AiBB is committed to making sure our Ai learns from ranging markets, more stable markets, sell-offs, and strange situations until it is a master of the market.
Will they mess up as in the traditional markets? Probably. Ai can’t learn everything that’s never happened. But the longer it works, the better it gets. The market, too, gets liquidity, stability, and a more stable basis for trading.
Computers have always been great at crunching numbers with better-than-human results. We’re excited that they can now also anticipate market movement and allow us to give traders the tools to participate.
An AiBB crypto market is secure, stable, and simplified.