Robot Trading and Artificial Intelligence – How It Provides Efficiency in Forex Trading

Robot Trading
Robot Trading

Artificial Intelligence (AI) and machine learning has become a breakthrough in the past 60 years. Although AI has not been properly established, it greatly helped us satisfy our needs in a much efficient and easier way. You have heard of the word AI countless times and it made you think that everything automated around us is powered by AI.

What is Artificial Intelligence?

Artificial Intelligence or simply AI, aims to replicate the level of intelligence of humans through a machine. But this isn’t something achievable yet. Meanwhile, Machine Learning (ML) is the latest technology that we have nowadays in which a machine is being taught to attain better performance after data is given to them. What’s fascinating about ML is that it can automate human tasks and help people do their daily routines.

But AI and ML shouldn’t be mixed up with Robot Trading since they are different. FX robots are programmed by traders to perform something in Forex trading but with ML, you provide additional data and the machine learns to process it to comply with your needs.

Humans Versus Machines

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The Forex Market is too tricky for ML as it involves price fluctuations, political, psychological, economic, and environmental variables. But engineers are capable of teaching machines when it comes to predicting the outcomes and sequences of data at a time series.

Sentimental Indicators

Predicting the trading results is conducted by experts by combining things like sentimental analysis, q-learning, and knowledge graphs. The sentimental indicators then analyze the news headline and other related articles on different social media platforms as well as from news agencies. They connect it to the buy and sell data taken by the q-learning.

This entire process is very time consuming and requires a lot of patience and hard work. But as you already know, these steps are necessary to attain success in forextrading. The sentimental indicators of investors can also be sold to pro-traders, banks, social trading platforms, hedge funds, and other likes.

Trading Signals

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You should not mistake trading signals as a call to action because it is not. Rather, it is a real-time notice informing you of the market opportunities. You can stick to your trading strategies depending on the investment horizons that you have and the risk tolerance as well. Usually, trading signals are made by analysts. However, as for data analysis, Machine Learning has a lot of advantages. ML can go through a wide range of metrics that come from a variety of sources. As to the present day, once ML analysis is done correctly, it can generate a lot of trading signals which are applicable for long-term perception.

If you diligently follow the trading signals which are from Machine Learning (ML), you can easily optimize your trade’s risk/reward ratio.

Which is Better, ML, or AI?

Both ML and AI have their own set of advantages at hand. Robot Trading and Machine Learning lets you distinguish the kind of tool that you need to successfully perform your trades. ML and AI have moved from experimental into being utilized in our daily lives. But trading is so complicated that it wouldn’t be too scary to rely solely on them. But with the continuous advancement of technology, there will surely come a time when trading will greatly involve ML and AI.  

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