AI TRADING
In our last article “TRADING FUNDAMENTALS” we talked about trading and how complex it is to be a successful trader. Therefore, in today’s article we want to talk about algorithmic trading, a concept that is gaining popularity for its efficiency and security and in which IAESIR has been working for a long time to offer you the best possible service.
HOW DOES IT WORK?
Algorithmic trading is the perfect combination of the best of a trader and the best of modern technology.
First, we understand by algorithm the set of mathematical rules and procedures that are used to solve a problem or perform a specific task. Algorithms are the basis of modern technology and allow us to program a computer to perform complex tasks, automating and processing large amounts of data in a very short time.
We find algorithms everywhere, from the recommendations made by Netflix to the operation of autonomous cars today’s technology makes use of increasingly complex algorithms.
Now do you see how interesting it is to use algorithms in a field like trading?
That’s right, programming algorithms for trading allows the user to automate market operations according to their strategies in an efficient way and without emotional deviations that may lead traders to bankruptcy.
The idea is disruptive and has a lot of potential, but once we analyzed the results we quickly discovered that this tool is very static. In the end, our algorithm will execute the trades for which it has been programmed regardless of the constant change that characterizes the financial markets, preventing us from making the most of this powerful technology. This is where artificial intelligence helps us to streamline our algorithm and make it truly profitable.
ALGORITHMIC TRADING WITH ARTIFICIAL INTELLIGENCE
As we said, just programming an algorithm to execute our strategy is not enough. We want it to be dynamic and able to learn and change the route when necessary, within predefined limits. The main difference between a basic trading algorithm and ours is its automatic and supervised learning process through machine learning (a concept that we will go deeper into in future articles).
Our team of traders works daily to design the most profitable and safe strategies, then our programmers design the algorithm that will execute all the parameters of the strategy and thanks to machine learning and a lot of work, we make our algorithm capable of learning from each operation performed as a real trader, but without the human defects of it.
MAIN ADVANTAGES
EMOTIONAL BIAS: By making decisions based on patterns and objective data, our algorithm avoids the emotional bias that affects human traders. Fatigue, the emotional burden of error or greed are not aspects that can influence decision making, which significantly limits errors.
SCALABILITY: with an algorithm as powerful as ours and a team of experts controlling and analyzing all possible deviations, it is possible to use this tool on several markets, assets and timeframes simultaneously. This allows to increase the probability of success by not missing any opportunity, something impossible for a trader, no matter how good he is.
SPEED: one of the greatest advantages of new technologies is their ability to analyze large amounts of data in a very short time. This allows us to make the best decisions in the shortest time possible, again increasing the probability of success.
OPERATING: in general a successful trader usually works 4 to 6 hours a day analysing and trading in the markets. If we take into account that the cryptocurrency market is open 24 hours a day, 7 days a week, an average trader would be missing 75% of all the trading every day. Obviously a person cannot work so many hours, while our algorithm is constantly in the market.
At IAESIR we are aware of the potential of this technology and how much it can help, always trying to improve and offer you the best possible service with the latest technology available to us. This way of trading is totally disruptive, but as we always say, this is just the beginning!
We hope this article has been interesting and as always from IAESIR we not only encourage you to use our services, but also to be part of our community.
