Admit it, the first thing that popped into your mind when you saw “Artificial Intelligence” was the idea of having a robot doing your bidding for you. The idea goes back even to the earliest forms of media. The competition between the human brain and artificial brain is one that has produced some great movies and TV shows. However, what was once science fiction became a field of study, and that field of study became an industry with applications in everything. Artificial Intelligence is a broader field of study than most people realize; no matter how many times they saw The Terminator.
Understanding Artificial Intelligence
To understand the concept of Artificial Intelligence, especially regarding its application, we must first understand intelligence. The hypothesis that an individual with a high IQ knows more than someone who has an average, or even below average IQ, is not accurate. Intelligence isn’t the amount of knowledge someone has, otherwise giving an IQ test to a third grader wouldn’t make sense. Rather, it deals with the speed and efficiency at which someone, or something, can ingest, process, and apply new information; meaning more intelligence equals faster learning. Artificial Intelligence, then, is only limited by the imagination of the individual who is implementing it (or is it?)
With the exponential increase in computing power and the relative decline in its cost, A.I. has become more available to the masses. It doesn’t take a degree in computer science to utilize the technology either. Through cloud computing services, you are no longer capped by whatever hardware components you have on hand. It also allows for integrating with pre-built A.I. and Machine Learning systems, so anyone with a moderate understanding of computers and web development can give it a try.
Now for the million-dollar question! Who cares? If you wanted to build software, you would have gone to school for that. If you wanted to run complex mathematical and big data modeling algorithms, you would have bought the scientific calculator instead of the simple one with the big keys, right?
To answer that, let’s switch gears and talk about an industry that has seen an influx of new technologies touting Artificial Intelligence.
Applying Artificial Intelligence to trading and investing
With most of the trading and market participation performed exclusively by computers, you are surrounded by big data computer modeling, machine learning, and automated trading algorithms every time you enter the market.
Some are harmless. Like a retail trader using an automated system to collect their minuscule piece of the financial market pie. Others are not so innocuous, spending their time analyzing trader and investor behavior, watching for anomalies, and finding ways to eliminate perceived market inefficiencies. Keep in mind that banks and larger financial institutions, and by extension their algorithms and computer programs, are not concerned with buying low and selling high to make a few bucks. That topic, however, is beyond the scope of this article.
More important than how other individual traders and institutions use Artificial Intelligence is how you can effectively participate in a market by taking advantage of this powerful technology. Think about the best trader you know. Now, consider how long it takes them to retrieve market data. Or retrieve intermarket data from various sources, perform their analysis, and finally make a decision based on it. In the time it took us to write that sentence, a computer did all of those things…times 10. Afterward, does it take a break, or go on vacation? No, it keeps learning and processing data. The best A.I. systems even begin to anticipate changes in market conditions before they occur!
Remember the description of intelligence given earlier? It is the ability of an individual, or a computer system, to ingest, analyze, and learn from new information.
VantagePoint – The first Artificial Intelligence forecasting tool made available to the retail investor
Here’s what you should know about the specific application of Artificial Intelligence. As well as how it’s not just being injected into the financial market analysis, but has become a platform for it. To illustrate this, we will use one of the world’s leading Artificial Intelligence based market analysis software; Vantagepoint. Our company has been providing A.I. based market analysis and software for decades. And our founder is a leading innovator in this field.
Vantagepoint uses Artificial Intelligence like Machine Learning and Deep Learning neural networks to analyze the markets. Simply put, these algorithms are ingesting data, analyzing data, learning from the data. And then taking it a step further by making decisions and producing highly accurate predictions based on the data. That more than matches our definition of intelligence. Vantagepoint helps traders:
- Spot trend reversals 1-3 days in advance with up to 86% accuracy
- Analyze the global market relationships using patented AI indicators
- Time entries and exits with precision for maximum profitability
- identify optimal trading opportunities in just minutes each day
- Manage positions with complete confidence
At its core, A.I. is technology that provides users with the increased capacity to ingest data, process it, analyze results, and make decisions. For more information about the technology behind Vantagepoint and our pioneering efforts in the field of Artificial Intelligence and trading, request a free demo here.