Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Role of AI in Forex Trading

Currencies / Forex Trading Jan 06, 2023 - 10:53 PM GMT

By: Boris_Dzhingarov


According to estimates, the global forex market is worth $2.409 quadrillion, while some $6.6 trillion is traded each day across three separate trading session.

These figures have increased markedly since 2016, thanks to the rise of automated trading and the deployment of artificial intelligence (AI) to help minimise risk and optimise returns over time.

But what exactly is AI, and how has it helped to change the world of forex trading over the course of the last decade or so?

What is AI?

While AI is considered to be a cutting-edge technology in 2023, the earliest successful iteration of this concept was actually written way back in 1951 by Christopher Strachey.

Prior to this, famous mathematician Alan Turing had described an abstract computing machine that consisted of limitless memory and a scanner that could move back and forth through the memory banks, laying the foundation for the AI programs that we see today.

In simple terms, AI describes the simulation of human intelligence and its associated processes by machines, usually computer systems and algorithms. To achieve this, it features a number of different technological components, including machine learning, while specialist hardware and software is deployed to create the necessary algorithms.

AI systems broadly work by ingesting and collating large amounts of data (from both structured and unstructured sources) and analysing this for relevant correlation and patterns.

From here, systems can make informed and accurate predictions about future trends, with this having relevant across a broad range of applications.

How has AI Changed Forex and its Trading Mechanisms?

Ultimately, AI and machine learning have enabled traders to draw more complex datasets from a wider range of sources, improving the quality and depth of their financial analysis.

This includes drawing information from unstructured data sources such as social media platforms, allowing for real-time trading insights and even making it possible for novices to build expert forex strategies through social and copy trading.

Because of this, AI is thought to eliminate the negative impact of human emotion and risk associated with individual trades, while furthering the scope of automated trading in the marketplace. Currently, it’s thought that 90% of traders use automated or AI-inspired algorithms to make money in 2023, highlighting just how popular the technology has become.

In practical terms, AI aids forex traders through the application of machine learning and predictive analytics, which combine to collate and analyse existing data to forecast future market fluctuations.

What’s more, predictive analytics software is capable of reviewing huge swathes of data much quicker and with virtually no mistakes, potentially levelling the playing field between inexperienced and seasoned investors in the process.

In this respect, AI is a game-changing technology for the forex market, while it continues to drive increased participation rates across the board.

By Boris Dzhingarov

© 2022 Copyright Boris Dzhingarov - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in