While the financial industry has embraced automation and algorithmic governance more eagerly than almost every other industry, it seems there is still room for new breakthroughs. One of the most significant developments in the world of FinTech may have just arrived, following the news that a ‘trading robot’ that specializes in foreign exchange (forex for short) transactions, known as the SetBot, is set to transform a $6 billion a day industry.
First founded by Robert Lotter back in 2004, the SetBot has since been upgraded and updated in line with the latest breakthroughs in AI and data analysis to the point where even first-timers who have no knowledge of the forex industry now stand a chance at making a success of it.
Basically, the SetBot works by utilizing the immensely powerful statistical analysis algorithms to allow a user to spot movements in the market in minute detail. As you may already know, foreign exchange is based on the fluctuating values of different pairs of currencies. Within a pair, say the US Dollar and the Euro, the value of each relative to the other may move up and down due to real-world events.
For example, the Euro may decline in value due to a recession warning for Germany, whilst the Dollar’s value will rise. Being able to anticipate these events and determine what their impact will be on currency pairs was once a skill that only seasoned and highly trained financial professionals could harness.
The SetBot takes all of that expertise and analyzes vast amounts of real-world data to allow anyone to identify which direction the market is headed towards, and hedge their bets accordingly. Of course, trading robots that aim to help more people participate in the financial markets have been widely available for some time.
In the so-called High-Frequency Trading sector, news-based trading robots and text-reading algorithms have helped novice traders make sense of the market for several years now. These tools are used primarily to improve efficiency and to factor in huge amounts of data when a trading platform is generating the latest market stats.
One of the key innovations promised by the SetBot is that it is able to take advantage of enhanced processing power and speed to determine which way the market is moving, and by extension how currency values will fluctuate before anyone else does. Traders on Wall Street and expert brokers have access to information that affects the market long before such information is reported on the news. SetBot is able to use its algorithm to process all of that information to give users advanced knowledge that other traders may not notice.
In addition, the creator of the SetBot claims that one of the main intentions of his invention is to help rookie traders dispense with what he calls “dishonest brokers”. These are described as brokers who close trades early before a trader is able to realize the full profit potential of that trade. The SetBot counters this by alerting the trader when this is happening, thus preventing them from being taken advantage of by a broker who would rather hoard the potential profits for themselves.
Put simply, SetBot promises to widen access to the massive global forex market by both simplifying the trading process and increasing transparency. Inexperienced traders can use the SetBot to spot potentially lucrative patterns in financial data, whilst also staying clear of dishonest brokers within the industry.
In this way, the SetBot represents an emerging promise of algorithmically driven finance, the promise that those who may have previously felt ‘locked out’ of the industry by knowledge barriers can rely on impartial technology to see through the noise.
While it is impossible to predict whether the functions of the SetBot will soon become industry standards, its initial popularity certainly looks promising. Make sure to stay tuned in order to keep updated on all of the latest developments within the rapidly evolving world of big data and the financial industry.