August 8, 2020
AI impact on stock trading

How Deep Artificial Learning Can Help Wall Street Trading

AI impact on stock trading

In the past few years, many people have been very worried that artificial intelligence could start taking the jobs of the millions of truck drivers. It turns out, however, that there are more areas in which we should be concerned about artificial intelligence taking over. It looks like many Wall Street hedge fund managers and traders may be affected by deep artificial intelligence.

Many of the big financial companies such as Goldman Sachs are beginning to switch to systems which are driven by artificial intelligence and are able to see into the future regarding market trends. This means that the computers will be able to make better trades than many of the well-seasoned traders. Because of this, it looks like many of the Wall Street traders could get let go just as easy as factory workers getting dumped for machines.

Software Can Continuously Learn

Many of these artificial intelligence systems are being created by startups around the world. The software systems are able to take in huge amounts of trading data regarding any market and use that information to make a prediction about things such as bonds, stocks, and many other types of financial products. These software systems are also able to easily download information from tweets, financial data, news reports, international money policies and even television shows. They may even take information in about lending institutions such as those who offer online title lending loans. Any information that the software can find can be used to make more accurate forecasts for trading purposes.

Outperformed Traders

A report done by one of the startups creating these artificial intelligent systems monitored over 20 hedge funds and consequently found that they all outperformed any funds that relied on human traders. These artificial intelligence machines have been compared to doctors in a way that they keep up with all of the latest in research. For doctors, this can mean a better diagnosis for their patients. For the AI trading systems, this will mean a more accurate forecast for stocks and other trading.

Hedge fund managers cannot stand up to their AI counterparts. Humans have sensitivities and biases when it comes to their forecast. The AI systems rely purely on statistics and data to make their forecasts.

What Will Happen To Human Stock Traders?

Research shows that trading out human traders with AI could be devastating. Wall Street traders and hedge fund managers have soaked up a huge chunk of America’s brightest and best graduates. Almost a third of the graduates for many of the top business schools end up going into the field of finance. Only around 5-percent of those go into healthcare. Even less than that go into manufacturing or energy businesses. The amount of those top graduates who actually go into nonprofits each year is almost too small to mention. Most of society sees this as selfishness because many of these stock traders earn millions each year.

According to the chief scientist of Aidyia, there’s at least one benefit to having artificial intelligence systems take over the finance industry. He says that his AI machine will never have the need for human intervention. He also said that if everyone dies, his machine would continue trading. So, it seems that if the world were to end today, at least some people would still end up getting a great return on their retirement funds.

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