Can AI-powered trading systems beat simple algo ones?
We present you deconstruction of top algotrading companies. You will find out which algotrading system is worthy of your fund managing
Algotrading is the process of using computing programs to execute a set of algorithms for opening and closing trades based on a developed strategy. Certain sets of rules are based on terms, price, quantity or some mathematical model. It is possible that self-learning systems and artificial intelligence can be used as well. In addition to trading opportunities for traders, Algotrading makes trading market more transparent and available to everyone. The process seems to be more systematic by excluding the emotional impact on trading activities.
Let’s go through the top players on the market who suggest you to exchange the human factor for algorithms for you to no longer allow you profit strategy to be unstable. We’ll go through pros and cons of what the best tools on the market have to offer to expand your trading experience and increase funds.
Enigma is a decentralized computation platform. The main feature of the platform that has been marked by the developer is that it’s private and no third party is involved. Previously some ICOs were attacked by hackers, and they even managed to steal the money of token owners. That was quite unpleasant that a startup who claims to be completely safe and private gets around $500,000 in crypto coins stolen after hackers found a breach and gained acces to, just because its CEO didn’t change a password for his email account. Poor security caused the incident in the first place.
The company promised to help get the money back for those were scammed, as Guy Zyskind, co-founder, and CEO of Enigma wrote on Medium: “So we are taking responsibility. We are deeply sorry for the pain experienced by those who lost funds to the scam attempt, and we want to make sure that no one in our community that was a victim to this well-coordinated phishing attack is financially hurt. We will restore funds to everyone that lost money in this recent scam attempt after our token sale concludes. We’ve already been in direct contact with some of the affected parties.”
That didn't sound really comforting. Especially when they raised the hard cap by 50% 6 days before a token sale. The company responded to the criticism by making their Subreddit private and removing all the posts about their market cap change.
Next big app is Quantopian. It is a crowd-sourced quantitative investment firm. People around the world write investment algorithms for Quantopian and are getting paid based on their strategy's individual performance. So you get your reward after quite a long sequence of events of evaluating of your algorithms, receiving a license agreement in case the algorithms proved their value and only after a selected algorithm generates positive returns, the author gets a cut.
The great stroke for the community involved was the shutdown of the live trading on Quantopian.
“That was the key feature when they started and made me create an IB account just so I could get the full feature account and now shutting down this feature…” says a Reddit user.
Still seems that this approach of using of algorithms created by other people mostly without any AI power involved shows a poor result. Also shutting down of the main features of the service won't make the audience wealthier. There’s a reason to look forward to something that can be absolutely safe, innovative, technologically proven and transparent.
The third player we decide to examine is Numerai. It is a decentralised hedge fund. This system is powered by AI. But the users notice that the barrier of entry is too high. Data scientists trains their machine learning algorithm to potentially earn a few hundred dollars per week. An uncapped amount of your NMR stake may be lost when your algorithm is wrong. Another big drawback of it is that staking is required in NMR, but payments are made in Bitcoin.
The last product on this market to overview is Mirocana. The project is new, but is already attracting investors. The company has just started its Token Sale. By purchasing MIRO tokens you get discounts up to 30% and other bonuses.
Mirocana is a multilayered predicting engine developed for stock, currency and cryptocurrency markets. The project embodies neural nets and complex deep-learning technologies. It excels in using macroeconomic and financial indicators, activity of traders and hedge-fund managers. The activity of other traders is just one of many factors on which the system bases its predictions. It keeps an eye on funds, fundamentals, chart patterns, price levels, correlations, technical indicators, news and articles, blog posts and tweets.
The Mirocana system is also capable of calculating the risks based on the chosen amount of annual return. It generates predictions for over 400 companies that are traded on NYSE and NASDAQ stock exchanges. On Currency Market, the system can predict 125 currency pairs that are available with OANDA broker. 90 crypto coins that are traded on the Poloniex, Bitfinex, Bitstamp and many other digital assets exchanges are also possible to be predicted with the help of Mirocana.