It is estimated that between 60 to 75 percent of trading on all major stock markets around the world is algorithmic, dominated by high frequency trading, bots, algo trading, algo portfolio management, and increasingly, the use of Artificial Intelligence (AI) in algorithmic trading and finance. While it is difficult to put a precise figure on the percentage of algorithmic trading that uses AI, in recent years, Machine Learning (ML) has dominated the industry using big data trained on learning networks to statistically risk adjust individual trades to entire portfolios. While much of the use of this technology is in the hands of market professionals, knowns as “quant traders” or “quants”, it is now increasingly becoming available to “retail traders”, and solutions are starting to emerge for crypto trading. ChatGPT has heralded the next era of heuristic technology using Large Language Models (LLMs), generative text models that are optimized for a variety of natural language generation and specialized tasks. These models are characterized by their large size and enabled by AI accelerators which process vast amounts of data through data scraping from the Internet. LLMs such as ChatGPT help interpret charts, trends, and financial indicators and deliver results in an understandable form. The analysis can support traders with their understanding of market dynamics, risk factors, and investment opportunities. Cryptocurrency exchange Coinbase Global now uses ChatGPT for risk analysis and screens any new digital asset being added to its platform with the help of ChatGPT. There is crypto bot Omni for the Solana blockchain that can support passive income strategies such as crypto staking and claims to be an “expert” on DeFi.
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