As a person who has been very keen on the financial gags and changes in the trade industry through technology I have as an individual seen the rise of this debate between the machines and the humans here. This issue has become more and more important as the world is moving into an era of more intelligent business in the banking sector.
The Rise of AI in Trading
AI has experienced dramatic developments in the trading sector thus enjoying multiple benefits such as;
- Speed: AI systems can perform large data calculations and make trades within a second
- Efficiency: AI cannot be affected by the mood or any feelings of tiredness
- Pattern Receptor: AI can find interesting patterns in the market in an efficient way
- Continuous Execution: The AI can trade all the time without a break in the service
The Human Edge in Trading
AI has some significant capabilities, but human beings still have some benefits that AI does not possess;
- Intuition: A human can have a feeling of the overall market and can modify himself in an absolutely unforeseen situation
- Creativity: People have the capability of learning and developing new strategies in the event of shifting market conditions
- Complex Decision-Making: Humans are very proficient at making decisions in conditions that are unpredictable
- Relationship Building: Human traders are able to make friends and build relationships with clients
The Future: Collaboration Rather Than Domination
In my opinion, the future standpoint of the trade industry is not any of the two cases, AI dominating humans or vice versa but of collaboration. Here is how:
- AI-aided Human Trading: AI can provide valuable information and data analysis to help the decision-making process of humans
- Human-Controlled AI: The AI system is under the control of humans, for example, when they need to intervene day-to-day information during trading days.
- Combo Strategy: Speed and efficiency could be the features that are uniquely coupled with human intuition and creativity.
- Regulatory Aspects: Human oversight will continue to be necessary in ensuring the ethical conduct of trading and adherence to regulations
Preparing for the Future
In my opinion, in the future of trading, one of the imperative requirements is that traders should:
- Embrace Technology: Learn to work with AI tools and understand their capabilities
- Develop Unique Skills: Centre on the domains, in which people still have an upper hand such as strategy building and client loyalty
- Continuous Learning: Constantly track the newest market trends and technological developments
- Adaptability: Be ready to make changes and accept new roles and duties in the industry
In a nutshell
While the role of artificial intelligence in trading will be increasingly elevated, I do not see a situation where it becomes the sole actor in the trading industry. Instead, the most right way is that integrate the service of both AI and human professionals, thereby we can effectively tap into both human resources and state-of-the-art technology to conquer the intricate world of financial markets.
A good starting point if you want to know more about that would be the following reference list:
Investopedia’s AI in Trading Guide
CFTC’s Report on Artificial Intelligence in Financial Markets
Coursera’s AI in Financial Markets Course
Note: Although this article is based on both my personal experience in the industry and relevant research, it should not be regarded as 100% objective. Always remember to take advice from financial specialists and be aware of the latest rules and market trends with regular inspection.
