Artificial Intelligence is one of the greatest disruptions predicted to change the way that business operates over the near future. All kinds of industries have already adopted it in order to streamline everything from logistics to HR procedures, and it’s no surprise that financial trading is one of them. After all, it’s a field where many traditional trading techniques rely on the processing of a great deal of complex data, combined with economic, political and even consumer behavior considerations.
Despite this, there remain a number of observers who believe that human intuition is an even more important element than simple number crunching. Even more significantly, they believe that it will never be fully replaced by machines, regardless of how well those machines “learn” to react in certain situations.
This argument may have its merits in certain circumstances, but an equally large number of people believe that the sheer processing power of AI, along with the fact that it has constant learning programmed in, means that it is always going to prevail.
Supporting this supposition is the fact that AI is free from the emotional elements of human intellect. It’s these that can as likely derail successful trading as help it to come off as intended. For example, all traders rely to a lesser or greater extent on the information they have at their disposal. It’s this which creates the bedrock of their decision-making abilities. Beyond that, it has to be put down as hunches or intuition that drive other decisions.
Looked at in this way, some could argue that acting on these is very similar to flipping a coin. But, in the case of financial trading, the consequences of calling wrong could be serious indeed.
So, looked at from this perspective, relying on the cold, hard logic of Artificial Intelligence begins to emerge as the right side to be on. This is true for stock and even more relevant for Bitcoin pro trading. In this, market movements are less influenced by the wider economic picture and more by trading patterns. So using a system that also employs deep learning is estimated to achieve a win rate of around 90% compared with the human trader’s 50%.
Another aspect of Artificial Intelligence that will, ultimately, give it a significant edge over the human counterpart is its ability to carry on learning and applying knowledge of previous experiences to the assessment of future events. As each week passes and more and more unique trading situations occur, each one will be used to refine and perfect future decision making. On a smaller scale, this is what enabled an AI-enable robot called Pluribus to defeat six poker professionals in 2019.
While no-one can seriously contemplate the day when the world’s trading floors are exclusively filled with computers quietly whirring, it is almost certainly true that human intervention will continue to be marginalized. But, rather than regarding the situation as an adversarial one, it’s more useful to regard it as a collaborative one. Human traders working alongside AIs are perhaps the best option for moving forward. That way, everyone may have a chance of winning.
