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Applications of Machine Learning Algorithms for Trading #9

Open jnewhouse003 opened 2 years ago

jnewhouse003 commented 2 years ago

Title

Applications of Machine Learning Algorithms for Trading

URL

https://logicai.io/blog/applications-machine-learning-trading/#:~:text=Commonly%20used%20trade%20execution%20algorithms,Percent%20of%20Value%20(PoV).

Summary

talks about what AI is and how being used in trading.

Key Points

-AI referees to the intelligence shown by computers. -Trade Execution Algorithms: They split the trades into smaller orders so that the impact on the stock price can be lessened. Commonly used trade execution algorithms are Volume Weighted Average Price (VWAP), Time Weighted Average Price (TWAP), and Percent of Value (PoV). -Strategy Implementation Algorithms: They execute trades based on signals they receive from real-time market data. -Stealth/Gaming Algorithms: Large trades or other algorithmic strategies cause price movements that are exploited by stealth or gaming algorithms. -Arbitrage Opportunities: The example of this strategy includes a situation in which the same stock ends up trading in two different markets at different prices. In this situation, this strategy involves selling higher-priced stocks and buying lower-priced ones. -companies like morgan stanley are using AI

Citation

Rafia 1 year, et al. “Blog.” LogicAI, 20 Dec. 2019, https://logicai.io/blog/applications-machine-learning-trading/#:~:text=Commonly%20used%20trade%20execution%20algorithms,Percent%20of%20Value%20(PoV).

Repo link