The Role of Artificial Intelligence in Trading Platforms

Artificial Intelligence (AI) is going to become the most powerful and gaming technology within the last few years. AI-powered components penetrate into different sectors, and trading doesn’t step aside from such a tendency. According to statistics, the market size of AI-driven technologies utilized in trading reached $22.3 billion in 2025. The analysts predict further growth of its size to $50.4 billion by 2033.

Key takeaways:

• What does AI do in trading?
• Should trading platforms integrate AI-driven technologies?
• The pros and cons of AI-powered instruments.
• How does Artificial Intelligence affect the global trading sector?

What is the Role of Artificial Intelligence in Trading?

First and foremost, one needs to outline the fact that a human trader is still the core of trading and investing processes; meanwhile, Artificial Intelligence is able to simplify many tasks, automate diverse processes, and save much time.

Under the term of “Artificial Intelligence in Trading” they understand a broad scope of instruments that are based upon the predictive analysis, machine learning practices, and other approaches claimed to help traders analyze the financial markets and understand whether the price of a certain asset is going to move.

Here is why AI in trading is not something precise – the term describes tens, hundreds, and thousands of diverse instruments utilized by traders.

How Does AI-powered Mechanisms Work in Trading?

The statistics say that AI-driven instruments are able to improve the quality of trading by 40%. What are the main tasks Artificial Intelligence can help with?

• The creation of algorithms. AI-driven technologies can be used for the creation of algorithms that take both technical and fundamental analysis into account. Such algorithms are especially useful for beginner traders.
• The creation and further testing of trading strategies. One more important function of AI technologies in trading lies in the ability of creating trading strategies. Furthermore, Artificial Intelligence tests a strategy in practice and helps outline the most effective trading approaches.
• Opening and closing positions. The AI-powered instruments do not need pauses and breaks; which is why such tools can be utilized for opening and closing positions in an unstoppable manner.
• The helping hand in learning. AI-instruments can become perfect assistants for both newcomers and experienced traders. As for the first ones, Artificial Intelligence will help beginners learn the basics and create their first strategies. When talking about high-level traders, AI mechanisms provide them with tons of new information to speed up the decision making processes.
• Advanced productivity. Traders access reports and analysis that require much time when provided manually. AI-driven instruments unlock all the necessary data in minutes.

On the one hand, AI-based technologies extend the opportunities of traders but on the other hand, that is not the panacea. Artificial Intelligence cannot solve all the problems traders may face.

The Core Branches of Using AI in Trading

 One can point out some core tasks the AI-driven technologies can handle with:

1. Predictive analytics and market forecasting. Through machine learning techniques AI-driven technologies are able to analyze historical market data and identify patterns to predict future trends. Such an ability helps investors and traders make better decisions based on expected market movements and minimize volatility risks.
2. Risk management. AI-powered systems evaluate risks and suggest diverse strategies for minimizing those risks for a trader or an investor. For instance, AI algorithms analyze data in real time to monitor the risk profile of assets and portfolios, allowing timely adjustments based on changing market conditions.
3. Algorithmic trading. AI is changing current trading practices with algorithmic trading systems that execute trades at high speed based on pre-defined criteria. These systems can analyze vast amounts of data: market trends, news sentiment, and historical performance to make trading decisions faster and more accurately than human traders do.
4. Individual trading and investment strategies. Artificial Intelligence makes it possible to create strategies that correspond to certain criteria and risk management rules.

The Usage of Artificial Intelligence in Different Financial Markets

The AI-powered technologies can be used in different financial markets being adjusted to personal needs of a certain trader or investor.

AI in Stock Trading

When used in stock trading, Artificial Intelligence can help traders pick the best stocks to invest. Traders and investors face overwhelming amounts of data, and the AI-driven technologies sort those giant volumes to save your time. As such, it takes several seconds for a trader or an investor to understand which stocks correspond to their investment/trading strategies.

For instance, a stock screener is a complex of instruments that takes multiple factors into account: fundamental and technical analysis data, market cap, trading volumes, etc.

AI in Commodity Trading

Commodity trading is a much more complicated sector than traditional financial markets like Forex or stocks; here is why Artificial Intelligence is claimed to simplify the processes. With the help of AI-driven technologies traders easily analyze agricultural conditions, macroeconomic factors, and understand whether the price of a commodity is going higher or lower. Artificial Intelligence processes enormously giant scopes of information that one cannot do manually; which is why such technologies make it possible to predict the market much more precisely.

AI in Crypto Trading

The crypto market is characterized by increased volatility. In addition, hundreds of new assets appear on the market every day. With the help of AI, a trader receives information about how promising a project is and can separate interesting cryptocurrencies from a scam. Artificial intelligence is also very important in terms of risk management, especially in leveraged trading.

AI in Forex Trading

The Forex market can be roughly divided into three groups of currencies: major, minor and exotic. It is easier to predict major currency pairs, since they are influenced by a smaller number of factors, while the value of exotic currency pairs is seriously affected by any event in a country or region.

For example, events in the US or North America do not have such a strong impact on the dollar exchange rate, but events in Brazil can significantly increase or collapse the Brazilian real.

AI helps traders understand how the value of a particular currency will change through analyzing both technical analysis indicators and political, economic and socio-cultural changes around the world.

AI in Energy Trading

Energy price forecasting is based primarily on macroeconomic factors. AI significantly saves traders’ time by providing all the necessary information. In addition, AI technologies promptly inform traders about changes that could affect the cost of energy resources.

AI in Option Trading

In options trading, the timely purchase or sale of an option comes to the fore. Traders analyze the market to determine the most attractive entry point. AI suggests when it is best to buy/sell an option based on the volatility of an asset, the current market situation, and specific factors affecting the underlying asset price.

The Benefits and Limitations of the AI-Technologies in Trading

When applying Artificial Intelligence in trading, there are both advantages and challenges. The following benefits of the AI-driven trading are pointed out foremost:

• AI allows traders to analyze huge amounts of information in the shortest possible time.
• With the help of AI-technologies traders and investors can quickly react to diverse changes.
• Artificial intelligence helps traders work on strategies in accordance with risk management principles and investment goals.
• Such technologies allow you to determine the most suitable entry point and open/close transactions with the greatest benefit.
• AI is exceptionally useful in algorithmic trading.

When talking about the challenges and limitations of the technology, the following cons should be outlined:

• Artificial intelligence is only effective if it has good and reliable information. If it relies on distorted data, all subsequent results will lead to erroneous calculations and wrong pieces of advice.
• Very often, AI trading platforms become a target for attackers. If the platform is not able to guarantee a high level of security, traders face a set of problems and threats.
• Another possible problem is the behavioral peculiarities of the AI. If the system is trained on historical data only, it may lose its relevance.

Is the Usage of Artificial Intelligence a Competitive Advantage for a Trading Platform?

Some 5-7 years ago the implementation of AI-powered tools could be understood as a competitive advantage; meanwhile, at present, that is more like a necessity to attract traders and investors. Newcomers understand the importance and efficiency of Artificial Intelligence; which is why they expect to access such technologies when creating an account.

Artificial intelligence is no longer something that gives a competitive advantage. The technology is rather something that allows trading platforms to remain competitive in the market. Without the implementation of AI, it is extremely difficult for brokers to win the fight for new users.

On the other hand, trading platforms can imply the latest AI tools and instruments and upgrade their functionality to let their users utilize the newest and the most effective technologies.

The Bottom Line: AI-Powered Tools as a Must-Have Feature for Traders

When talking about today’s trading platforms, the leading ones unlock access to AI-driven instruments that save much time, simplify market analysis processes, and help traders work on their personal trading and investment strategies. At the same time, one should not understand Artificial Intelligence as something that guarantees success – AI-driven tools have their own hurdles and limitations.