How Artificial Intelligence Helps Traders In Understanding the Market

Over the past few months, the hype around artificial intelligence has been gaining momentum. Smart bots have already been credited with superpowers: from writing books, paintings and music to making trade deals on stock, trading and cryptocurrency exchanges. Is this so, we asked Gleb Jout, head of the Bitget crypto exchange in the CIS.

The creation of ChatGPT and its copies started a new era of artificial intelligence, which, of course, provides the execution of process functions. For example, smart bots collect and analyze a large amount of information, take short and long notes, and look for data that is open in sources. Does this mean that AI is completely replacing human intelligence?

Certainly not! For some reason, many traders believe that the same ChatGPT is nothing more than a magic “big money” button. Guys, slow down. Artificial intelligence will help you analyze the market, but will it be able to place orders correctly or create an effective anti-risk strategy? No, definitely not.

Is it worth it in this case to abandon modern technologies altogether? I wouldn't recommend it. The trader's task is precisely to combine his own experience and knowledge with the latest technological developments to get more profit. Therefore, AI tools can be applied if:

1. It is necessary to collect market analytics for a certain period. ChatGPT will do just fine with this task. It is enough to formulate a task for the AI assistant, and the program itself will collect data from open sources.

2. Automate trading. Trading AI bots allow you to perform all trading operations without human intervention according to predetermined parameters. The main advantage is that the robot is able to complete transactions in a fraction of a second, when the rate of a particular coin reaches the set price. A trader does not need to constantly be in front of a computer monitor.

3. Ready bots for copy trading. Such solutions allow a quick copy of the trades of successful traders and making a profit without a deep understanding of the market. The copy trading feature is available on many centralized exchanges, including Bitget.

4. AI strategies for grid trading. Grid trading is a fairly complex trading strategy, especially for beginners. It is suitable for a volatile market without a clear bullish or bearish trend and relies on identifying patterns in a large array of historical data. The user places pending orders to buy and sell in a certain price range. When the value of an asset fluctuates greatly, orders are filled and it makes a profit. The use of AI just allows you to identify these patterns based on historical market data. Let me remind that Bitget launched AI strategies for grid trading back in early July.

5. Martingale trading strategy with AI. Another use case for artificial intelligence is its integration into the Martingale strategy. Initially, it was used in gambling, so it is quite risky. Traders set risk appetite and investment frequency based on parameters recommended by AI from Bitget. Parameters are calculated based on historical market prices and asset fluctuations using Bitget's internal algorithms, providing traders with reliable investment advice.

In general, the use of AI can really make a trader's job easier, but don't forget about the risks that few people talk about. Let's look into them.

Analyze and analyze again. No AI tool will give you a clear answer whether to make a deal or not. Such services will only help to collect information, but the decision is always yours. Therefore, you should not blindly trust artificial intelligence and enter a trade with all the money you have, because ChatGPT said so.

Don't forget the risks. Modern trading bots have not yet learned how to effectively predict and minimize risks, so it is still worth learning risk management and properly organizing an anti-risk strategy.