Artificial intelligence is permeating the world of finance, significantly influencing trades and financial decisions. The software employed at leading financial institutions employs models capable of analyzing millions of features and data points, thus enabling a whole new level of accuracy with the prediction of financial markets.
The Evolution of Stock Trading
Stock trading has been a significant part of the global economy for hundreds of years. The concept took its first form with the creation of the first stock exchange in 1602 in Amsterdam. Later, the Philadelphia stock exchange was launched in 1790 and was subsequently renamed the New York Stock Exchange in 1863. However, with the invention of the computer, the way stock trading was practiced changed drastically. High performance computing now dominates financial trading, and artificial intelligence further elevates this by enabling computers to learn their own rules for stock picking.
High Frequency Stock Trading
The evolution of stock trading is closely linked with technological advancements. Due to the advent of the computer, trades can be executed with trading algorithms, eliminating the need for human intervention in a trade. High-frequency trading, as a result, has improved liquidity in the stock market and almost guarantees profits. However, this advantage is primarily held by large financial institutions, who invest billions in low-latency research to ensure they have the information and can execute trades before anyone else.
AI in Stock Trading Software
While high-frequency trading might be out of reach for most, software can still be utilized to predict future stock performance. With ample historical data and knowledge of machine learning algorithms, creating software to predict stock prices is not an insurmountable task. These AI tools can process and analyze a vast amount of data, identify patterns, and make predictions about future trends, thus assisting traders in making informed decisions.
AI-Powered Stock Trading Software Solutions
Several off-the-shelf AI stock trading software solutions are already available on the market. These pre-built platforms have undergone rigorous testing and offer quicker implementation.
Stocks Neural is a highly-regarded software that incorporates neural networks into trading strategies. It utilizes historical stock prices from the Quandl and Interactive Brokers datasets to provide analysis and recommendations of trade signals using recurrent and convolutional neural networks. They are also working on incorporating corporate news indicators into their product.
Wave 59’s software is built around the implementation of AI modules to predict future technical indicators. Users can purchase data streaming options directly from the website for a monthly fee. The software also includes advanced analysis methods such as Fibonacci analysis.
Optimustock enables analysts to perform both fundamental and technical analysis. Uniquely, it is an Excel plug-in, powered by a back-end neural network that facilitates feature selection for both fundamental and technical analysis for determining stock purchasing.
GMBH Shell excels in time-series forecasting and offers a forecasting solution that touts rapid speed of analysis. It can determine the structure of model that should be used automatically. However, it is a general time-series forecasting solution and may lack some of the stock-specific benefits other solutions offer.
New Entrants in AI Stock Trading Software
In addition to the existing players, new AI-powered stock trading software solutions are emerging, offering innovative features and methods to aid traders. These include Trade Ideas, TrendSpider, Blackboxstocks and EquBot, which provide functionalities such as automated technical analysis assistants, advanced charting technology, and comprehensive scanning and backtesting8.
The introduction of computers brought about a significant change in stock trading, and artificial intelligence has once again revolutionized the process. By analyzing thousands of features with copious amounts of historical data, AI stock trading has become increasingly prevalent today. As AI continues to evolve, so too will the software that enables AI stock trading, promising even more precise predictions and profitable trading opportunities.