A significant number of brokers offer their services on the financial market as many people are trying to make money from currency fluctuations and other stock market assets. Unfortunately, some investors lose their money in unequal “battles” with professional players because they don’t use advanced technologies like artificial intelligence to their advantage. https://light-it.net/blog/ai-in-stock-trading-benefits-safety-measures-and-vital-features-to-include/
The combination of information technology and financial management is already changing stock markets and the main trends of financial markets. In this article, we will explain the role of technology and trading robots that many investors and traders use in financial markets.
How It All Began
Long before computers appeared, exchange trade players began to invent new ways of efficient trading. Special tools were designed to increase the chances of successful transactions at the exchange market and provide a broker or trader with an additional income source. The first technology to burst into stock markets was technical analysis.
By using the power of technical analysis, brokers and traders started to build various mathematical curves. Among other tools that appeared for trading purposes were oscillators and indicators that showed stock market players when it was best to buy or sell an asset. These tools weren’t trusted at first, but any investment meant that a player would face many risks anyway, so people were willing to risk with the tools in hopes of getting profit more efficiently. As technology proved to be a real asset in the financial field, such mistrust vanished and traders began to use them actively. On top of that, traders continued to improve upon technical analysis models.
Main Trading Technologies
Nowadays, almost any broker offers its clients automated trading systems as additional services. These systems provide traders with a wide range of opportunities: from simple trading advising services and recommendations to fully automatic analysis and management of the investors’ activity even without their direct participation.
The world has changed as bright math and engineering minds have started to cooperate with financial experts and analysts closely. So now, with the advance of new trading methods and technologies, we can see how the battles between financial specialists turned into competition between trading algorithms. Currently, just one bot is able to generate up to 2,000 claims for financial tools in a second. The demand for these bots has caused a lot of IT talent to enter the financial field to help develop smart AI-based assistants and make money out of their work.
Regulations and Prospects
The legislation of the US and some European countries restricts the usage of trading bots for manipulating stock prices. Authorities accuse these tools of market volatility and turbulence; however, experts find it hard to claim that the fault for the market changes is entirely on trading robots because its turbulent nature has always been so.
Sometimes trading robots work with excessive activity, which causes traffic overload on the stock market servers and market players observe that many deals stop abruptly on some platforms due to technical reasons. We also can’t deny the fact that there’s always a high possibility of fraud when it comes to money as some people strive to get easy money and are ready to ignore laws while trading. So, technology is both a blessing and a curse for the fintech industry. Thus, technical specialists have become a saving force for the field, ensuring high reliability and security of bots.
Even though some legislation restricts the usage of smart trading instruments, each year, the demand for qualified information technology specialists in building bots increases. These specialists can be hired to both create and maintain bots as well as ensure the security of the bots. Trade monitoring systems are also implemented to track the market participants’ activity, prevent violent price manipulation, and fraud. They also help specialists reduce traffic overload on servers and eliminate attacks on the information systems.
The rise of technology has crashed the traditional processes within the financial market causing the image of a typical trader to also change. Today’s successful trader is not the one holding a degree in finances or economics; it’s a person with a powerful gut feeling and luck. It’s a pragmatist who uses the advantages of the newest information systems, models, and technologies. The future of stock markets is in the vast implementation of trading bots.
This fact provides advantageous opportunities for IT specialists in the job market and gives them a push in professional development. Qualified AI developers will improve the quality of trading robots and enhance their reliability and security on financial platforms to provide users with considerable profit.