AI Explained: The Beginning of AI

What comes to mind when you hear the word “AI”? We would probably immediately think of robots, automation, smart devices, self-driving cars, and so on. Artificial intelligence—AI—has been around for decades and began as an innovation to streamline cumbersome, repetitive tasks so that production costs are reduced and human labor can be used elsewhere. Today, we can see just how far we’ve come in reducing the human factor with AI: virtual agents, automated financial assistance, online mapping, speech recognition, facial recognition, and so forth. Less known is how AI applies to trading or how AI helps with trading. We already know that financial markets are hard to predict. The marketplace is complex and filled with multiple variable that are constantly changing every day. People need look no further than Bitcoin’s price history to see that the future performance of some financial assets, currencies, or commodities cannot be accurately predicted. That said, companies are increasingly willing and eager to invest in AI and use it to its fullest potential. According to a JPMorgan 2020 study, AI has long been replacing transactions in the stock market: over 60% of trades over $10 million are executed using algorithms, which is expected to grow by $4 billion by 2024 with total volume at $19 billion.