How Artificial Intelligence can be used in Trading Software

Original article was published on Artificial Intelligence on Medium


ARTIFICIAL INTELLIGENCE

How Artificial Intelligence can be used in Trading Software

Artificial Intelligence/AI is the term used to describe Computer’s ability to simulate human intelligence. Currently, Technology is the synonym of the human brain. Learning, logic building, reasoning, perception, creativity, these were once considered as human instinct, but now these attributes are being replicated by technology and used in every industry.

Chatbots or live bots, Google’s Home, Amazon’s Alexa are the common examples of AI which has been a part of handling customer service requests or company websites.

In the Stock market, AI is a game-changing technology. Investment in stocks and trading in stocks are two paradigms of the stock exchange platform. Trading stocks is a means of building short term wealth and Investing is a means of building long term wealth. Deep learning techniques to recognize patterns in stock charts that a human might not be able to.

AI Systems will use historical data to learn how the market reacted in past events. Based on these reactions, they can learn to behave in more productive ways in future market conditions, making them even more accurate and reliable.

Stock markets are generally suffering from recessions, ups, and downs in the trends of the share market is a regular happening in the finance market. Investor’s analysis of stocks lies upon abstract reasoning and that abstract reasoning can be given into a logical shape by Artificial Intelligence.

“By incorporating AI into our monitoring systems, we are sharpening our detection capabilities and broadening our view of market activity to safeguard the integrity of our country’s markets.”

— Martina Rejsjo Vice President and Head of Market Surveillance, North America Equities, Nasdaq.

Nasdaq, USA is applying artificial intelligence on its U.S. stock market to detect irregular and potentially malicious trading activity.

How Trading can be Improved by AI

· MARKET PREDICTION BASED ON SENTIMENT

Though investors’ activity in the stock exchange platform always fluctuates. The motive behind buying and selling of a stock is not always constructive and logical. Market Influence impacts hugely for investors or traders. That is why to read and analyze the sentiment of a human is best possible with the help of AI technology. Based on the analysis, an exchange can gain profit for the investors and traders both.

· MARKET SURVEILLANCE

Data breach, fraudulent activity is a Big threat for any sort of business activity and once stock exchanges are a sensitive place of business and financial activity, it should be more promising to save and secure data for Stock exchange. Artificial Intelligence tools can be monitored over the market activity 24/7, money heist possibility can be prohibited.

· RECORD OF CLIENT EXPERIENCE

As every trading can be monitored minutely through AI, the client’s experience and behavioral pattern can be analyzed. A huge data collected by AI Tool will help to understand market trends which will be helpful both for the market and investors.

  • UNINTERRUPTED TRADING
  • means automated trading without even needing to call your broker or get on an app.

DEEP LEARNING — ANOTHER AID TO AI

Deep learning allows computers to learn — with or without human oversight — from intricate patterns and hidden relationships in massive datasets, whereas transfer learning creates new models from old models. Meanwhile, human-in-the-loop learning lets analysts share their expertise with the machine efficiently, allowing them to concentrate their efforts on investigation and evidence curation.

Benefits for the Exchange

In fact, according to a report by Boston Consulting Group, retailers that have implemented machine learning technology for personalization see sales gains of 6–10% — a rate two to three times faster than retailers who haven’t. And for marketers, AI can make teams more creative and help companies make better management decisions by providing new insights and better data analysis. Regardless of your industry, AI is everywhere.

Risks involved with AI

There are risks involved with AI technology, but the traction any exchange can get out of using it is a few times greater than the risks.

In some cases, companies are using older data analytics tools and labeling it as AI for a public relations boost. But identifying companies actually getting material revenue growth from AI can be tricky.

And How BSI Integrates AI into Our Exchange Software

Customers of tech companies — spanning banks and finance, stock exchanges, health care, energy, retail, agriculture, and other sectors — are expected to increase spending on AI to get productivity gains or a strategic edge on rivals.

Business Software India has developed Exchange Software that is governed by Artificial Intelligence devices. Our AI and Blockchain technology-enabled exchange software which has been used successfully by few exchanges already.

What programming languages/libraries are used

  1. PYTHON
  2. TensorFlow
  3. OpenNLP
  4. PyTorch
  5. Keras
  6. Theano
  7. Pybrain
  8. OpenCV