Trading with AI: a way to make money
It is important, first of all, to define: What is Trading?
«It is the objective of making profit from the frequent buying and selling of stocks, raw materials or currency, selling at a higher price than the one for which it was bought,» according to Economias.
Currently, most Trading on the stock exchange is done through automatic or algorithmic trading. This development is closely linked to technology and digitalization, so it is expected that in the future automation processes, algorithms and artificial intelligence will be in command.
What else are the advantages and disadvantages of AI in trading?
According to some authors, for the ideal functioning of financial markets, it is necessary that they follow the characteristics of markets in perfect competition and the appearance of artificial intelligence, contributed positively to that functioning.
«The advantage of using artificial intelligence is that it normally increases liquidity, reduces cost, decreases the range of buying and selling quotes and, therefore, price formation becomes more perfect,» specifies José Luís Crespo, Researcher at the Institute of Economic and Social Analysis (IAES). Another advantage is that they automatically negotiate in different geographical areas and with different types of goods.
There are, however, the negative aspects of this system, «numerous academic studies point out that automatic trade usually leads to greater volatility in asset trading, especially in times of greater market uncertainty. In other words, when volatility is high and new information reaches the market, the risk of the asset increases,» says Crespo.
This type of system attracts many people, because it is an easy and fast way to generate profits from investments, but it is important to be cautious and perceptive.
«The mathematics of the models is precise, but the models are not, being only approximations to the complex real world. The practitioner should therefore apply the models only provisionally, carefully evaluating their limitations in each application» Quote from Professor Robert C. Merton, Nobel Prize in Economics 1997 .
Safety in online forms is the key to a good customer experience
As the web advances, it has become increasingly easy to collect and analyse sensitive consumer data. The data can be collected both through cookies and online forms and contains important information on how to improve the customer experience and develop smarter marketing and sales strategies.
However, the collection and use of the data can be a ‘two-pronged’ process, as when customers share their personal data with companies, they are also placing the responsibility on them if they are misused.
How is the correct processing of data guaranteed?
The first and most important step is to recognize security as a marketing concern and not just the IT department.
Security in the ‘eyes’ of marketing
It is in marketing, where most data collection takes place, so it makes perfect sense to ensure security in order to protect sensitive information. The lack of security allows criminal agents access to information that can be used to steal identity, forgery, among others.
To protect yourself and others it is important to take security seriously and as such you should re-examine what you do with the information, from the data you collect on registration forms, to systemic issues such as security practices and accountability.
Security as an integral part of marketing DNA
Changing the data security approach is not an easy task, but fortunately there are some measures that can help you achieve better security and a better customer experience.