If you’re someone that only buys VOO or SPY, then I’m not talking to you. You are the “safe” investor. Maybe you understand the power of compound interest, and know that when depositing $500 per month every month for 40 years, you’ll have over $2.5 million while only having deposited $240 thousand into the account.
|
Maybe you’re just risk-averse, and the thought of doing something that people consider “hard” intimidates you. After all, nobody wants to lose money after investing so much time and effort into researching effective strategies. It hurts. It’s physically painful, and most people would rather play it safe than risk loss.
|
But if you're the type of person that likes to pick out individual stocks, take risks, and make trades, then you cannot afford to miss out on the opportunity of a lifetime. You need to incorporate AI into your investing research process.
|
What is Artificial Intelligence (AI)?
|
AI has become a bit of a buzzword thanks to the advent of ChatGPT. However, at its core, AI
has fundamental use-cases that makes it an excellent technology to help you with your trading decisions.
|
To start, I'll first define "Artificial Intelligence". AI is a series of algorithms that enable computers to simulate human intelligence. This includes the ability to analyze vast amounts of market data (at speeds and depths beyond human capability), recognize patterns, and make decisions with minimal human intervention. AI systems can learn from data, adjust to new inputs, and perform trading tasks more efficiently and accurately.
|
There are different types of AI systems. There are chatbot AIs called Large Language Models (LLMs), similar to ChatGPT. These models are capable of responding to human input, automating text-based tasks, reasoning, and more. NexusTrade uses an LLM, named Aurora, as an entry point for many of its features.
|
There are other AI algorithms beyond Large Language Models. There are image generators like DALL-E, speech-to-text translation models like Whisper, and a plethora of other AI tools. NexusTrade also incorporates other less common AI algorithms, such as genetic optimization. These algorithms simulate evolution to iteratively improve and optimize trading strategies based on past historical performance. AI as a tool can really be applied to a variety of domains, but this article will focus on trading and investing.
|
How can AI help you with investing?
|
Within two years, you're not going to just want to use AI with your investing. You're going to NEED to, and if you start late, you will be left behind. AI can automate processes, and condense tasks that would take a skilled financial advisor weeks into just minutes. This remarkable speed and efficiency not only streamline decision-making but also provide a significant competitive advantage in the fast-paced world of trading.
|
Think I'm BSing? Let's look at 3 examples:
|
Finding New Investment Opportunities
|
Think about how you find novel investing opportunities today. You likely use Reddit or Youtube and you basically are copying what someone else told you to invest in. If you're a skilled investor, then you may even read the news, check out financial earnings documents, and add new potential investments into a backlog where you can monitor and perform detailed research later.
|
What's the problem with this approach? It is subjective. Someone else, whether its a TikToker or a writer for Bloomberg, told you to buy a certain security. And they may have good arguments! Maybe the stock had great earnings. Maybe the business has been highly profitable for the past 5 years. But the fact of the matter is, you're making your decisions based on what someone else told you. Not on cold-hard data.
|
This comes to a stop in an AI world.
|
The fact of the matter is, AI allows you to find novel investment opportunities within seconds. You don't have to read Bloomberg or go on TikTok. You can find objective information based on facts and data.
|
Executing Trades in the Market
|
When it comes to executing trades in the market, manually trading has a lot of problems.
For example, when trading manually, you succumb to your emotions. If a position isn't going your way, your body starts to fill with adrenaline, and you panic.
|
Trading algorithmically forces you to become a systematic trader. You have to define your strategy ahead of time (often with data), and then you iterate, refine, and test it. When things don't go your way, you've already defined what your portfolio should do, so you don't have to worry.
|
NexusTrade offers tools to trade in a sandbox environment. In the near future, full algorithmic trading with real capital is on the horizon.
|
Performing in-depth Financial Research
|
Lastly, AI transforms the way we do financial research. For example, let's say I wanted to see how Amazon did in its last earnings.
|
We get all of the information instantly. We don't have to search through 5 different websites or figure out what the financial jargon means. Aurora does the work of deciphering everything and making the information presentable to technical and non-technical users.
|
What if I don't want to use AI?
|
I'm not forcing you to use AI. But, you should really want to.
|
The people that choose to change and adapt are going to make better investing decisions. This is just a fact. They'll be able to find novel stocks based on fundamentals instead of what some guy told them to like. They'll be able to automate their decisions, and test their ideas on historical data. And they'll be better equipped to parse complex financial documents.
|
This is just the beginning. AI has far more use-cases than what I've outlined here. In fact, this article barely scratches the surface of what's possible. Imagine a future where you can talk to an AI agent to execute your trades, and the agent warns you the risks associated with that decision. Imagine a world where you can analyze thousands of news articles within seconds
and have your strategies automatically updated in real-time.
|
The difference is clear. AI isn't perfect. It makes mistakes or has bugs. But it is efficient, reliable, and only getting cheaper and better every single day.
|
NexusTrade allows you to incorporate AI with your trading. It streamlines the process, and makes it easy even for a child to use if they put in the effort to read and learn. The NexusTrade blog is full of articles, and I'm available to answer questions 24/7 through email.
|
Are you going to let someone else make your next trading decision for you? Lose more money in the market because some article told you that XYZ was a good investment? Or are you going to take your financial future into your own hands?
|
Want AI to transform your approach to trading and investing? Sign up for NexusTrade Premium today!
Agree or disagree with my opinion? Make a post on Reddit, X, TikTok, Threads, or any other social media platform. If you create ANY post that links to this one, I'll send you 14 days of FREE NexusTrade Premium (Starter Pack). Just email me a link to the post.
|
|
