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AI In Forex Trading: Money Loves Smart Tech Much has already been said about the ways the boom in artificial intelligence technology is helping investors working with classical financial instruments like stocks and ETFs. But there is more to AI in finance than that, and today, we will take a look at another major area for implementation of AI – namely, the use of AI in the vibrant, volatile world of forex trading. Forex trading mimics traditional investment: both are making a bet. An investor shorting a shock is making the bet that the stock price will fall, allowing the investor to profit off the difference between the price at which the stocks were sold initially versus the price at which they were bought back later. Similarly, a forex trader makes a bet that a certain national currency is set to do well vis-à-vis another one. As an investor, you can pick one stock among thousands, but as a forex trader, your bet must always include two choices. Last year, Nikkei announced that its proprietary AI has been able to beat human in forecasting the dynamics for the dollar/yen pair.



Read more. Growing Rich 2.0: AI-Based Tools for Wealth Managers The sphere of wealth management is going through some dramatic changes. The use of high-tech financial services is on the rise with the advent of robo-advisers that utilize artificial intelligence. AI-based tools for asset managers will be the next big game changer for the industry. Human cognition has its upsides, bringing theory and intuition to the table, while AI can only approximate that through advanced statistics. AI, on the other hand, is not susceptible to emotion or stress and works 24/7 to ensure real-time market monitoring and analysis. Artificial intelligence-enabled solutions will become a new and efficient tool in the arsenal of human professionals. AI-driven decision enhancement tools can help wealth managers by suggesting investment strategies based on customer’s profiles or even by helping identify the most lucrative investment solution.



Read more. AI vs Technical Analysis: Can AI Improve Your Stock Trading Strategies ? Technical analysis is a method of evaluating securities using only the stock’s price and volume as inputs. Technical analysis assumes that all known fundamentals are factored into the price. The most popular forms of technical analysis are simple moving averages, support and resistance, trend lines, and momentum-based indicators. Any trading strategy that involves technical analysis involves identifying trends and patterns that forms on charts and numbers. These charts are all based on historical prices of any security or asset, and so are exposed to human error through Representativeness Bias, where people tend to evaluate the next move based on recent events. Goldman Sachs has begun to automate currency trading, and has found that four traders can be replaced by one computer engineer. Techniques like Machine Learning have created new systems to spot patterns. Since finance is quantitative, AI in stock trading is gaining traction. In 2010, high-frequency and algorithm trade accounted for 60% to 70% of trading in the US alone. By 2017, JPMorgan reported that traditional traders represented a mere 10% of trading volume. In fact, Wall Street had its first 100% AI-powered Equity Trading Fund (ETF) in 2017 and its shares rose by 20% in one year.



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Adobe Stock Forecast: Onwards and Upwards Adobe belongs to the technology stock sector – a sector vulnerable to global slowdown worries, like the ones occurring today. Adobe has long been an investor favorite, with its stock price increasing sevenfold from 2012 through the end of 2018 — six times more the S&P 500 Index. Although the technology sector is growing at its fastest rate in over seven years, interest rate cuts are likely and Goldman Sachs research that analyzed seven rate cutting cycles over thirty-five years found that while the S&P 500 climbed a median 14% over the year after a rate cut, the tech sector lagged by 13% – the worst performing sector in the index. Moreover, antitrust probes in the technology sector also threaten its growth. Adobe, however, can remain strong even if the technology sector undergoes difficulties due to its strong business developments, financial fundamentals, and lack of association with the trade war.



Within the software-application industry, Adobe is a leader. According to CEO Shantanu Narayen, “Adobe is the absolute leader in content management…the leader in being able to create these mobile applications.” Furthermore, Narayen believes the development of AI will continue to aid Adobe because of the opportunity to participate in the global digital transformation.



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Inverted Treasury Yield Curve: Interest Rate Forecast and Recession The US government issues debt in order to fund its various projects and activities in the form of securities – namely, Treasury bills, Treasury notes and Treasury bonds with maturities ranging from a few weeks to 30 years. These securities are traditionally seen as some of the most risk-free investments, as they are backed by the US government, which means the probability of a default is pretty low. Also, the demand for T-bonds and T-notes is an reasonable indicator for investors’ confidence in the US economy for the medium and the long run. Naturally, the securities come with different yields, which, normally, are the lowest for the shortest securities. However, since May 2019, the yield for the 3-month bills has stayed above the 10-year rates, as anticipated in the recent I Know First interest rate forecast updates. In financial terms, this is known as the inverted yield curve, where longer-maturity securities offer less of a reward. The difference between the rates for the 10-year and 3-month securities issued by the US government is a solid recession predictor. Read more.

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