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How AI Is Shaping Forex Trading

First Posted: May 05, 2019 10:34 PM EDT
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The 21st century is rapidly becoming defined by the emergence of intelligent machines powered by impressive software, yet few people have paused to consider the immense ways that AI is already changing our financial markets. While much attention is being paid to autonomous vehicles and the rise of AI assistants in the home and workspace, virtually nothing is being said about the astonishing way that AI is shaping Forex trading and pushing it in a new, better direction.

How is AI disrupting the world of currency markets, and what does this promising technology hold for the future of trading? Here's how AI is shaping Forex trading.

AI is already trading currency

It's not technically correct to assert that AI is the future of currency trading - after all, the technology is already being used to trade currencies around the world today. Nevertheless, we're just beginning to see the real potential of AI grow as it pertains to financial markets. A number of impressive examples already serve to convince investors and the public of the burgeoning potential of these intelligent machines when it comes to the future of Forex, too.

According to NASDAQ, the Forex market is the most actively traded market in the world, serving as a digital silk road that connects countless investors and marketplaces together across boundless distances. Sometimes, all of this activity can be too much for the human brain - countless Forex traders can tell you about how dizzying sums of numbers and ceaseless transactions piled on top of one another until they overwhelmed their ability to trade. Without the help of useful apps and software, we could never make sense of this confounding marketplace.

These days, however, the market is getting more understandable and easily navigable despite its growing status. That's because AI is already being leveraged by a wide array of actors to make sense of the digital noise that makes up so many market transactions. The Japanese company Nikkei uses AI software to predict fluctuations in currency markets, for instance, which can be immensely useful when it comes to earning a profit. By vacuuming up huge sums of data for their programs to crunch, companies like Nikkei can produce clever algorithms that know infinitely more about the future of the market than human actors ever could.

Forex traders aren't all pleased about the rise of AI, however, as it's forced some of them to confront fraudsters in new and challenging ways.

AI fraud is rampant in the market

Many traders are finding themselves beguiled by tech-savvy companies that promise huge results but deliver meager insights after taking a hefty paycheck for themselves. This is an unfortunate result of the AI explosion, which has supercharged a number of fraudsters who believe that they can ride the coattails and reputation of more successful AI traders in order to scam others in the market. Knowing if a company is lying about AI is now an essential part of being a successful Forex trader, and currency experts who refuse to master this nascent technology will soon find themselves sorry they didn't wrap their heads around it sooner.

Not everything about AI and its impact on Forex is about fraud, however, as these clever algorithms are legitimately capable of making a huge difference in the market. Forex trading robots are starting to spring up, for instance, which enables investors to automate the more mundane aspects of the trading process, so they can focus more time and creative talent on challenging business and investment opportunities. As Forex trading robots keep grabbing headlines, they'll become normal parts of the Forex marketplace that everyday traders will need to adapt to.

The rise of algorithmic trading using a forex VPS can seem daunting to some Forex traders, and not without good reason - after all, some AI programs are capable of trading huge sums of money in less than a heartbeat, which has led many to fear AI-abetted financial crime. What's to say that your AI companion can't turn on you or be exploited by an outside hacker in pursuit of access to your funds? As AI becomes an ingrained part of Forex trading, IT security will become an even more essential element of succeeding in the marketplace.

Don't think AI is overhyped when it comes to how it's changing our world - just look at how AI is shaping Forex trading to see how large of an impact it will have on our markets and everyday lives alike. Investors who think that they can ignore the rise of impressive algorithms in the market are kidding themselves, as the future of trading is becoming more algorithmic and automated by the day. If you're interested in earning a profit through Forex trading anytime soon, you need to become a master of AI and how intelligent software is coming to redefine currency trading.

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