Foreign events caused a brief correction in the S&P 500. The markets bounced back when investors realized the image was not real, but not before stocks had temporarily lost $500 billion in market cap. So that’s AI for you, a double-edged sword which can punish or reward. Let’s focus on the benefits, which are many.
Favorite AI chatbots, chat GPS, finance investing, or trading. ChatGPT says AI is already having a significant impact on each of these areas, and its influence will continue to grow. Let’s look at each one of these areas one by one.
Number one: automated trading. Did you know that algorithmic trading already accounts for more than half of the stock market’s trading volumes? Algorithmic trading is when the system trades automatically on your behalf based on certain rules. And the system keeps doing this every time the trade presents itself. But did you know that advanced algo systems have a machine learning component built in them? The system itself learns from its experience and makes changes. That’s nothing but artificial intelligence.
Number two: risk assessment and fraud detection. AI is used by traders, but regulators are also using AI to detect patterns. Imagine if certain related parties are carrying out what we call circular trading to artificially inflate volumes in a counter. With the help of AI, regulators can identify such traits faster than they used to. For example, an AI system can monitor trades for such anomalies and flag them. AI systems can also alert if certain patterns can create serious risks in the stock market.
Number three: NLP (natural language processing) is AI’s ability to understand human language. ChatGPT’s foundation is built on NLP. AI can not only be used as your personal finance assistant, clearing your credit bills, monitoring your credit cards, etc., but it also has use cases in investing. For instance, it can read articles and tweets to find out the sentiment prevailing on the stock you have invested in.
Number four: predictive analytics. AI can help you make predictions about the future based on historical price patterns and data analysis. As AI gets more advanced, you can build very powerful models incorporating everything from sentiment analysis to macroeconomic developments. But to do all of this, you will need a robust understanding of statistics.
Number five: personalized financial planning. You’ll be able to use AI to create a personalized financial plan for you. Team Salmania will help you tell where to invest to build up that corpus.
Number six: enhanced customer service. AI chatbots will increasingly be used to process and answer customer queries, not just in the financial landscape but across all companies.
Buy today, sell tomorrow (BTST) trade, and you get a warning from the broker about short delivery risks. And AI chatbots can be right there to tell you what it means and how you can mitigate the risks.
Don’t forget to share this video and comment down below how you will use AI as an investor. Thank you. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
