How AI Can Make You a Better Trader

Since the 80s, we’ve watched automation make the buy side of trading much more effective. But when it comes to the retail side, the technologies haven’t evolved at all. 

But that’s where Quantreex comes in. It’s a web based trading platform that allows you to create automated trading strategies in under a minute. It also AI and machine learning to help you control risk and increase returns.

On a recent episode of the Payments Innovation podcast we caught up with Ali Kousari, Co-Founder of Qantreex, to get an inside look at why this solution works and what it could do for you. 

Most retail traders lose money on the market…

Most of retail traders lose money on the market. 

The reason being a lack of controllable risk and leverage. 

One solution is creating algorithmic trading strategies. But there’s still a major issue here. Once built the strategy soon gets out of scope because there are opportunities on the market that basically override all the rules. So, you have to keep tuning those models to be able to profit from the market. 

So, algorithmic trading is a very complicated and expensive solution. 

Unless you use Quantreex. Here’s how it works.

…but AI can help

One of Quantreex’s earliest ideas was to use AI to manage the risk of different strategies. 

Some strategies can do very well during a period of time but then they start to fade. Some could come back. Or maybe they could be adapted to certain types of markets. 

But if you have an automated way to adjust that, you won’t have to focus on single strategies and you’ll be able to manage your risk better.

An AI model can help you allocate the capital to your different strategies. 

It creates a type of diversification, but it’s basically adjusting to the market in real time without selling off or trying to rebalance the whole portfolio. Ultimately, using AI in this way allows you to be more effective.

AI could even help you design strategies

And another area that they’re working on is where AI can really help you actually design a strategy. 

The process of creating a strategy can take months. 

Maybe weeks if you’re very experienced. 

But if you have this AI aspect and you increase your throughput, you’ll be able to profit by trading more on the market.

And, AI doesn’t have emotions

So, AI can help you create better strategies and do a better job at managing them. 

But aside from these two technical areas, there’s one more way that AI can help you be a better trader. 

We all have emotions. And as hard as we try, these emotions inevitably get in the way when we make trades. 

But here’s the thing: AI systems don’t have emotions. 

They never trade on emotions. 

So, by relying on an AI system to help you with your trading, you’re going to become a stronger trader.

So, AI makes you a better trader. But how much better?

Quantreex, of course, has their own live trading accounts. 

And everything they do is based on returns and losses that they experience in those accounts. 

When they compare metrics of accounts balanced by the algorithm and those that are run separately, they see a difference of 20-30% in returns.

They also look at how long strategies generated by machine learning remain effective in the market, compared to strategies created by an experienced human trader. The human’s strategies usually fade after about 2-3 weeks. But the AI strategy keeps performing because it automatically adjusts to the market. 

While we haven’t seen a lot of new technologies in the retail trading space, it’s safe to say that Quantreex is here to change that.

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Until next time!