Why does AI fail to work well with financial market trading strategies?

Before we ask why, let’s ask: does AI fail here? There’s a common misconception that AI can’t helpfully predict markets, making it useless for trading. However, the usefulness of AI depends entirely on how it’s applied. AI can be extremely beneficial for traders, as it analyzes information at incredible speeds, and is not affected by human emotions when trading.

AI doesn’t fail as a part of good market trading strategies. Used right, AI is a valuable tool to any trader.

Many believe AI is the trading tool of the future, and perhaps humans will be rendered useless due to the superior abilities of AI. For now, we should view AI as a valuable tool to cooperate with in order to maximize our chances of profit in the market.

Limitations & Benefits

AI is a fantastic tool, but it does have its limitations.

  • Inflexible
    • AI is usually given a set of parameters to act upon. For example, it is taught to react a certain way when faced with situation X. It does not recognize major market crashes, and will stick to its guidelines no matter what. Others claim that AI is unable to recognize patterns on a human level.
  • Inhuman
    • It seems obvious, but AI cannot account for various facets of the stock market, like insider trading.

Despite having limitations, the benefits of AI are instrumental, making it a necessary tool for a profitable trader.

  • Statistically accurate
    • AI programs don’t make mistakes statistically. They provide accurate and real-time data for day traders to act upon.
  • Unbiased
    • AI does not bring human biases into its analysis of stocks and currencies. These biases include behavioral bias, such as the bandwagon effect (when one simply follows what the majority of people are investing in), and emotional bias, such as overconfidence bias (when one believes he or she is at a higher level of investing than others, because one works in a specific sector that correlates to the market).

There are many tools that a profitable trader needs to use to be successful, including analysis, execution and experience. AI is great at analyzing the market and presenting its results in forms of signals or alerts. Using AI does not immediately make you a profitable trader, but it definitely increases your odds of success significantly.

Where can I find AI to help me trade?

There are some great tools built using AI which any trader can use to become more profitable. Two of the best are BetterTrader and Trade Ideas.

Bettertrader.co – AI tool for FX\Futures, trade ideas, and macro news coverage

BetterTrader is an AI program that takes scheduled news and studies how it affected the market when it happened in the past. For example, you are able to see how a below-expected unemployment rate release affects the S&P 500. This program provides you with trade ideas that are based on statistics and suggests actions for you.

Trade Idea – AI tool for stocks

Trade Ideas is a platform which allows you to use AI manually, or let it trade automatically. You are able to select from different market sectors to find trading ideas. Holly the AI engine is claimed to teach you how to be a better investor. Its simulated portfolios have beat the S&P 500 index.

We hope you find the articles on the site helpful. A good place to start reading, if you haven’t already is:



Written by: Jay Adward

We believe that traders need an edge that can only be gained by statistical analysis.

The way we accomplish that is by running statistical models in real-time and helping you to make the right decisions in real-time.

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