Predicting Chaos: Story Behind One of Israel's Most Advanced Fintech AI Start-Ups

Artificial intelligence technology is virtually omnipresent today. The rise of AIs has already transformed whole industries, including the financial sector. Finance applies AI to algorithmic trading: the idea that advanced AI may be able to assist the investors by predicting market dynamics with enough precision to make consistent profit. And while many advanced machine learning models developed for this purpose stay outside the reach of the general public, others are eager to make AI-driven trading available to a broader audience.

One of the leaders in this sphere is the Israel-based company I Know First. With its powerful cloud-based AI capable of predicting the price dynamics for more than 10,000 financial assets including stocks, ETFs, world indices, commodities, and currencies, it offers its forecasts to private and institutional investors alike. The story of I Know First's success, however, did not begin in the realm of finance. Instead, I Know First was created from chemistry.

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Algorithmic Trading with I Know First Versus High Frequency Trading

Competition between investment firms is more intense than ever before - firms are expected to consistently beat the S&P 500 in order to retain and attract new investors. Traditional tools and fundamental analysis are no longer enough to stay competitive in the contemporary market. To stay relevant, investment firms are looking to employ the most advanced tools to enhance their performance.



Many firms are turning to algorithmic trading. Algorithmic “Buy” and “Sell” orders account for 60%-70% of the US equity market in volume. Previously, only large investment firms and hedge funds were able to utilize these advanced mathematical models. I Know First, however, has developed an advanced self-learning algorithm that is utilized by both professionals and regular investors. Instead of high frequency trading (HFT), I Know First utilizes algo-trading, or quantitative trading to provide a “second opinion” a and verifying investor analysis or discover new market opportunities.

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Understanding Stock Market Predictions Using Artificial Neural Networks and their Adaptations

Artificial Neural Networks are computing systems modeled after the structure of the neurons in a human brain. This unique assembly of ‘nodes’ allows for a different kind of computing compared to the centralized processing computers that we use in our daily lives. ANNs don’t rely on a central processor, rather they are composed of many smaller decentralized processing nodes which are organized into computing layers. These nodes simply compute the weighted sum of the outputs from the nodes in the previous layer. In this way, neural networks can take advantage of parallel processing and non-deterministic computing.

Despite their basic structure, neural networks can have vast numbers of hidden layers between the given input and the network’s output, and can be programmed to perform different tasks. The structure and learning methods of neural networks make them perfect for solving many tasks that our own home computers aren’t designed to solve. Some of the most revered capabilities of neural networks are image and pattern recognition, time series analysis and prediction, and non-linear computation with immense, unlabeled data sets. Already, researchers are using neural networks to create innovative solutions in a diverse range of fields and industries such as finance and medicine.

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I Know First Evaluation Report for S&P 500 Index

In this forecast evaluation report, we will examine the performance of the forecasts generated by the I Know First AI Algorithm for the S&P 500 Index with time horizons ranging from 3 days to 3 months, which were delivered daily to our clients. Our analysis covers the time period from the 1st of January, 2019 to 19th of June, 2019. Below, we present our key takeaways for checking the hit ratios of our predictions.



Highlights:

75% Hit Ratio for 14-day time period of S&P 500 predictions allowing our clients to be able to invest their money with significantly less risk

Predictions consistently above 60% accuracy despite volatile conditions in the world economy over the last half year

Facebook Stock Forecast: Blockchain Bandwagoner or Pioneer?

It is difficult to overstate Facebook’s (FB) influence in Silicon Valley and Wall Street. It has 2.38 billion monthly active users and has added over $384 billion to its market cap for investors since its IPO. Some believe that Facebook is facing an existential crisis in light of an important paradigm shift among its users. The core Facebook website still has the greatest user engagement and revenue among its social media portfolio but is maturing the fastest. Facebook’s saving grace has been a series of prudent acquisitions but particularly Instagram for $1 billion in 2012 which has since transformed the company, expanded its mobile experience and maintained its relevance among the youth.

Facebook has recently announced big plans to roll out its own cryptocurrency in an effort that could disrupt global financial systems. They are calling this “Project Libra” and will name their coin the Libra. Their goal with the Libra is to provide accessible, better, cheaper and more transparent financial services by leveraging their platform (WhatsApp, Facebook, Instagram) for transactions.

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