Artificial intelligence has come a long way in penetrating our day-to-day lives. From our home assistants, through self-driving cars, to smart homes – today, AI-powered solutions are everywhere.
However, one of the most interesting fields where AI adoption has marked a remarkable success is stock trading. Due to their complexity and chaotic character, financial markets are very intricate structures that often turn out to be extremely hard to predict.
Thanks to artificial intelligence stock trading software, nowadays trading is brought on a whole new level - more professional and advanced strategies are applied easily and comfortably even by beginners.
BONUS: The two best A.I. stock trading software solutions revealed!
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The Best Solutions on the Market of Artificial Intelligence Stock Trading Software
For starters and for investors with less capital, it is often better to start with a ready-made trading service, so that they can taste the waters and deep-dive in the essentials of artificial intelligence stock trading software solutions.
Here are five of the most popular platforms on the market nowadays:
Trade Ideas is an AI-powered robo-advisor and stock scanner for stock trading, opportunity detection and back-testing. Trade Ideas employs a variety of algorithms to help users find potentially profitable trading scenarios overnight, thus preparing them to apply strategies with a higher probability for gaining alpha.
After the market closes, the algorithm (named “Holly”) starts analyzing the previous market session and its effect on the previous 60 trading days.
It then splits the applied strategies into 35 different concepts with different purposes that help it outperform the market.
The algorithm takes into account various factors, such as long and short positions, cheap and expensive instruments, fundamental, technical and social indicators, volume, etc.
As you can clearly see – Holly relies heavily on research and analysis.
In reality, this is the only way to fine-tune an algorithm – the more it trades and analyzes, the better it becomes at it.
If you want to find out more about the artificial intelligence stock trading software’s methodology, visit the Trade Ideas’ website.
The software also allows users to take advantage of an event-based backtesting feature that helps them find out the performance of certain signals, should they have been applied in the past.
There are also rich alert and chart windows, as well as full quote functionality to help traders filter all relevant information.
Trade Ideas is widely renowned due to its high-performing algorithms, rich functionalities and flexible personalization of the user’s dashboard.
To find out more about Trade Ideas’ performance, make sure to regularly check the updates in their blog or the daily performance and to read the in-depth Trade Ideas review now.
Another solution that is widely popular among technical analysts and day traders. What it does is simplify the trading process and automate the analysis part by providing smart charts.
If you wonder where is the AI-thing in all that, focus on the “smart charts”-part.
All the included features and functionalities, including:
conclusions for you to trade on.
Or in other words – the artificial intelligence stock trading software navigates you towards the most profitable trading opportunities, simply by highlighting them on the charts for the instruments among your watchlist (more info about this can be found in our in-depth TrendSpider Review).
Today, Trend Spider is renowned as one of the most comprehensive and widely popular artificial intelligence stock trading software. TrendSpider provides automated technical analysis assistants that offers a fully-customizable engine for more professional trading.
Blackboxstocks started in 2014, and ever since, they offer a stock screener solution that uses algorithms and artificial intelligence to filter noise out of the market. As a result, their proprietary algos come up with real-time based trading alerts.
Meanwhile, Blackboxstocks is by far more than at the beginning. They added extensive scans for the options market, and users can even scan for dark-pool activities.
Usually, the access costs $99 per month, but daytradingz.com readers can save 20% by applying our discount code. Besides the access to the stock screener, subscribers also gain access to a private twitter group and a private discord channel where real-time trade alerts for stocks and options are posted. One thing I like a lot about it, that only large-cap stocks are traded. This way, members can duplicate trades easily. More insights to this service can be found in our Blackboxstocks review.
EquBot is a powerful AI based exchange-traded fund. Their journey did start at Haas School of Business at UC Berkeley, and their mission is to "give everyone access to investment opportunities that artificial intelligence can uncover."
EquBot is a powerful AI for exchange-traded funds. Their journey did start at Haas School of Business at UC Berkeley, and their mission is to "give everyone access to investment opportunities that artificial intelligence can uncover."
Their multi-staged technology process seeks to optimize the investment process by analyzation based on quantitative and fundamental analysis. Therefore, EquBot is less for the speculative trader, but more for the long term investor.
Kavout is a data-driven platform for institutions and investors. Augmented intelligence is being used to manage wealth and generate alpha by doing more with less.
The Kavout product catalog included:
- K Score
All those catalogs include data from various measurable datasets like the K-Score, Price Momentum Factor, G-Score, Profitability Trend, and the Quality factor. The data history is available for thousands of stocks, and sample data is being provided.
Artificial Intelligence Stock Trading Software - How It Works
The idea behind artificial intelligence stock trading software is to help traders enhance the buying and selling process by making day trading faster, more efficient and better performing.
Machine learning has the potential to ease the way trading is done by analyzing large amounts of data, spotting relevant patterns and, based on that, generating an output that navigates traders towards a particular decision based on predicted asset prices.
In order to do that, algo-based trading mechanisms follow a pretty straightforward and unified methodology.
Although on practice, it is a little bit more complex, it can be simplified in the following 3 steps:
Gathering the data
Financial data is often considered as a chaotic structure. What is typical for chaotic structures and processes, however, is the fact that past events can massively influence the present and the future.
This means that historical data can be a very good source for predicting the price movement of a certain instrument.
However, sometimes it may be hard for the algorithm to find sustainable patterns in the data.
In order to solve that, it should be fed with as much unbiased information as possible within the artificial intelligence stock trading software.
Organizing the data
The way artificial intelligence stock trading software solutions work does not differ much from the approach human analysts usually employ.
After the data is gathered, the next logical step is to organize it and divide it into groups. Usually, there are two sets of data - a training set and a test set.
Why is that?
Before the algorithm is tested, it needs to be trained and fine-tuned which is what the training set is for.
After the algorithm is calibrated, it is then put into action with the test set.
Constructing the trading algorithm
The idea behind the algorithm is to help us make a prediction about the price movement of the asset that interests the trader.
In reality, there are plenty of ways to build a predictive algorithm.
However, most of them usually try to simplify the problem as much as possible and then follow a two-class model, based on the following factors - signal and predictability.
The first factor is intended to indicate whether a price increase or a decrease is expected, while the latter reveals the confidence behind that indication.
After the algorithm runs through the data sets and generates an output, the trader can easily filter the most predictable and best-performing instruments in the list and trade those with the highest signal strengths.
Time to make money
Wish it was that simple. Although most artificial intelligence stock trading software follow a logic that is similar to the above-mentioned one, in reality it is very hard to build an efficient and high-performing algorithm.
There are plenty of reasons for that – from the fact that the stock market is:
In reality a well-performing algorithm will be successful in at least 85% of the trades.
However, until reaching that level, the trader may end up losing lots of money.
That is why it is often better to take advantage of a ready-made solution that has been tested by plenty of other investors and has proved successful.
Apart from not wasting money on developing your propriety trading algorithm, you will be able to benefit from a more advanced, high-end technology.
In order to help you with the search of a suitable artificial intelligence stock trading software, here are again three of the best-performing and most popular solutions on the market for traders:
Artificial Intelligence Stock Trading Software Summary
There are pros and cons of artificial intelligence, but plenty of ways to employ an artificial intelligence stock trading software and become a better trader.
However, designing a truly efficient algorithm is a daunting and resourcefully-extensive process.
That is why the best way to proceed is to try one of the ready-made solutions on the market and kick-start your artificial-intelligence-powered trading methodology.
Trade Ideas is the #1 A.I. based stock screener out there, perfect for spotting of trading opportunities and automated trading.
Check out the Trade Ideas Review and grab your 25% Promo Code now. Trade Ideas is the best software solution for retail investors available right now!
TrendSpider’s focus is the visualization of trends within a chart by automatically drawing trendlines and patterns.
So it’s suitable for technical analysis based trading. In the meantime, however, you can also focus on building your own robot to help you conquer the financial markets.
In the end, one thing is clear – technology will continue to innovate, and trading will be one of the niches that will benefit the most. So it is all a matter of choice.
About the Author
Alexander is an investor, trader, and founder of daytradingz.com. After devoting many years to educating himself on powerful day trading techniques and effective investment styles, he started trading and investing more actively. In the past 20 years, he has executed thousands of trades. In 2015, he began writing articles about trading, investing, and personal finance. He is very passionate about sharing his knowledge and strives for success in himself and others. Alexander has been featured on Benzinga, Rockstar Finance, and ESI Money.