The use of Artificial Intelligence is limitless. It has already impacted almost any segment of our lives. It helps us get feedback from brands in real-time; it minimizes the risk of human error and automates most of our daily activities; it improves the photos we take on our smartphones; it assesses our creditworthiness, and so forth. One of the markets that benefit from artificial intelligence and Machine Learning most is forex trading. Namely, forex is the ever-growing industry that is worth $1.93 quadrillion.
In spite of the considerable funds that are at stake, trading is one of many domains of human activity to be affected by cognitive biases. What traders believe are valid judgements may in fact be the results of effort-saving mechanisms by the brain. Supposedly rational decisions may stem from mental shortcuts that ignore chunks of information, which can then have a significant impact on traders' results. Recent research in behavioural economics has identified dozens of common biases that can impact investment choices and practices. One of the most common is the disposition effect, where traders choose to sell and make profit on shares that have been going up in price for some time, while holding onto shares that are in steady decline, waiting for them to bounce back.
In the past five years, the global financial industry has experienced major disruptions thanks to innovative technologies in AI, Machine Learning, and Blockchain. The rate at which supercomputers are taking over the financial sector is leaving no doubt that the future of finance will largely depend on computer scientists and big data experts rather than the traditional financial advisors and traders. It is no wonder that the world top financial institutions are now hiring more quantitative analysts and computer scientists than the traditional financial analysts and investment advisors. The CFA Institute, the provider of the world most prestigious professional designation for financial analysts, has realized that it is no longer business as usual in the industry and is now including AI, Big Data, and Machine Learning in its Curriculum. On the other hand, Blockchain, the technology behind cryptocurrencies, is also having its fair share in the industry with analysts predicting that it will do to the financial system what the internet did to the media.
A visual representation of digital cryptocurrency Bitcoin is displayed on February 16, 2018 in Paris, France. Well, there have been plenty of developments in artificial intelligence (AI) and machine learning (ML), but opinions about them have been quite varied. One can marvel at how AI was able to perform traditionally "human" activities such as winning at poker or writing music. And, Google's predictive search, which can sometimes make outlandish suggestions and be eerily spot on at times, might make one sceptical too. However, AI can also be scary, as imperfections in the technology could also lead to harm.
Hundreds of new cryptocurrencies have been created and offered to investors through initial coin offerings (ICOs) over the past year. Millions of new users entered the crypto space in 2017 during this ICO boom. More are jumping on the bandwagon this year. Most people who've heard of cryptocurrencies – and many who have put money into it – only have a vague understanding of how these work as investment vehicles. Confusion among new investors has been high due to the abundance of coins and their fluctuating valuations.