How AI Is Used to Optimize Online Trading

The online trading industry is changing rapidly and, similar to other industries, Artificial Intelligence is one of the biggest driving factors. There is currently a range of AI-driven tools available to traders and investors, and, some of them are revolutionizing the way we trade.

From analytic software that can source and categorize considerable amounts of data in almost no time, to robots that spot trends and open trades automatically, there are tools that can support and guide traders during almost every step of the trading process.

While these new tools are being praised by some that claim it’s helped them achieve continuous profitability in everything from stock and commodity investments to cryptocurrency day trading strategies, others are more hesitant about the concept. Most traditional brokers have not implemented AI-based solutions. 


Now, how is the use of Artificial Intelligence in trading today?

At the moment, there are three main ways that AI is being used to support investors and traders alike.


  • Predicting Price Movements And Trend Spotting

The most extensive progress that has been reached in the field has been seen in AIs that source and process data for traders, such as analyzing previous price patterns and trends or recognizing patterns in financial news.

The software then uses the data to create investment advice with the goal of eliminating the need to analyze instruments on your own. By learning from previous price developments, these AIs can predict trends, and find opportunities that, otherwise, would have been lost.

IBM is associated with EquBot – an innovative, analytic robot that is spearheading AI development in the industry. The software has been designed specifically for exchange-traded funds and helps users find profitable opportunities.


  • Analyzing Trader Behavior

Several other operators have chosen to take a slightly different path and have developed AI that analyzes investor’s behavior to manage risk and optimize everyone’s ability to trade efficiently., an online broker known for being one of the best trading platforms, has been experimenting a lot in this sector, effectively becoming the first broker of its kind to launch an AI-driven trading platform.

By analyzing cognitive biases in their customer’s behavior, Capital dot com’s AI platform produces unique and personalized education plans for each customer intended at helping them make better trading decisions. Likewise, both professional and new traders are likely to get stuck in certain trading patterns, never developing new strategies or improve their knowledge, which is another issue that Capital hopes to combat with their innovative platform.


  • Artificial Intelligence Trading Robots

Trading robots that automatically open and close positions based on predetermined price data and alarms have been popular in the industry for many years, especially in Forex trading. And while robots do make it easier to be profitable, they are also rather limiting since they rely on the input of the trader that uses them.

A lot of research is being conducted on how to best combine AI’s ability to handle large amounts of data to spot trends, with a trading feature that opens and closes positions based on that analytic work. So far, some progress has been made but there is no AI trading robot that is effectively both analyzing and trading automatically yet.


The Main Challenge Facing AI Trading Software

There are great advantages to using several of the available AI trading software on the market. For example, their unparalleled data sourcing capabilities will never be matched by humans. And when used correctly, investors can allocate more of their time on certain analytic tasks at which they excel, while using the AI to handle the rest.

With that said, there are some major limitations to using AI’s in trading and investments. Similar to in other industries where AIs are being used, their inability to detect, read or experience human-like emotions is capping their potential, limiting a potentially industry-wide adaptation.

According to experts, AIs will never dominate the market or even challenge human analytic skills because of the simple fact that the stock markets tend to react to human emotions and emotional decisions. 



All things considered, AIs can and are already providing useful solutions for day traders and long-term investors from all over. They’re practical when used as tools in your overall trading strategy, especially for trend spotting, market predictions, and strategy optimization.

However, the technology is still at an early development stage and it will take time and innovation before we can expect AIs to be used extensively in the industry. Unfortunately, there are also many poorly developed trading AIs out there as well as dubious operators making claims they can’t back up, especially in terms of promised levels of return.

In the end, every trader and investor needs to be confident in their own skills to become profitable as a trader. At this point in time, there is no tool, feature, robot, or artificial intelligence that can substitute that.

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