Artificial Intelligence in the Global Financial Market: The Evolution and Algorithms Leading to Increased Trading Profitability

Impacts of AI on international trading 

It will come as no surprise that trading relies heavily on the ability to predict future markets accurately. Technology is proving useful in this sector due to the fact that enormous amounts of data can be processed instantly. By implementing AI, companies are able to, not only observe the data, but utilise it to predict patterns and therefore, future trading outcomes. Here is a look at how X Tech achieves this exactly:

  1. Pure mathematical modelling: This was used to calculate trades in the early stages of automatic trading. Today, different types of mathematical models are used to calculate current market tick data.
  2. Shape modelling: Financial markets will show a large variety of different shapes of price movement. Monitoring and analysing these shapes can help calculate a specific point (thereby improving accuracy of predictability). 
  3. The genetic algorithm: This repeatedly modifies a population of individual solutions and it is used in neural network algorithmic calculations. 
  4. Implementation of the ANN algorithm. As Robert Anderson from X Tech put it, “The neural network itself is not an algorithm, but rather a framework for many different machine learning algorithms to work together and process complex data inputs.”

Artificial Intelligence in the global financial market

Typically associated with robots (and their impending take-over), AI is utilised to boost many parts of the US economy. The financial sector is one of them. At banks, for example, Artificial Intelligence is used in several areas that range from operating chatbot assistants, to fraud detection, task automation and more. However, AI goes far beyond this. It is impacting the financial market on a more global reach. One of the ways in which this is being achieved is through the development of newer and more streamlined algorithms and systems. Examples are: the ANN algorithm and the X Tech System:

About X Tech and the ANN Algorithm

In 2015, with a focus on the company’s core strategies on high frequency reading, X Tech was established. Attention was brought to implementing the ANN (artificial neural network) algorithm more efficiently in order to structure the trading systems. This is an algorithm that is inspired (loosely) by the biological neural networks that constitute animal brains. 

After developing a genetic formula mode for the ANN algorithm in 2017, X Tech began testing it on the financial markets- with immense success. How does this algorithm improve global financial trading? Previously, 99% of trading markets would be closed in a matter of seconds. However, with the ANN algorithm, holding time now is often as long as one or two minutes. This is because ANN’s calculations show the forecast of the market position to be positive.

The X Tech System

One of the systems paving the way for the industry is the X Tech System. It is an over-frequency trading system based on the ANN algorithm. Thanks to its top-level servers located in various data centres around the globe, this system is able to connect liquidators with banks- at a global reach. The system comprises 18 data centres (with over 280 high performance servers) in 11 countries around the world. There by optimising efficiency and accuracy for trading in the finance sectors both in the US and internationally. 

Future of AI in the international financial sector

Artificial Intelligence does not seem to be going anywhere anytime soon. In fact, with the constant advancements and developments, it is only expanding. Companies such as X Tech are persistently researching improvements for their products with the aim of global expansion. By optimizing algorithms and systems, both US and international companies utilizing AI are provided with more accurate (and therefore profitable) results. 

The above was provided by Robert Anderson.