The future of stock market analysis

May 21, 2019  |  Devin Morrissey

stock market analysis chart

Image Source: Pexels

Stock sales and trading play a huge role in the U.S. and global economy. Stock exchanges provide the backbone to the economic infrastructure of our nation, as they help companies to expand when they’re ready by offering the general public a chance to invest in company stock.

However, investing in the stock market can be a gamble. You need to understand the market and know what you’re doing in order to receive a return on your investment, which is why many people go through stock brokers.

In order to understand the market and make predictions about it, stock brokers and investors pay close attention to data that helps them understand market trends and where smart investments may be waiting.

However, over the last few years, advancements in technology have provided investors with a new and valuable tool to make informed investments: artificial intelligence. AI has seen a huge amount of growth over the last decade, and it has been adopted in the financial sector for its ability to process data and discover trends.

Machine learning algorithms can track patterns within data and make it easier for investors to make better decisions faster. What does AI’s role in investments mean for the future of stock market analysis?

AI-Powered Predictions

The stock market moves faster now than it did in the past, which means investors need to do the same. Oftentimes, investors are up tracking the pre-market before the market even opens in order to analyze the volume and movement of stocks, as this often changes soon after the market opens and throughout the day.

Investors are constantly analyzing mass sets of numbers, including stock prices, gains and losses, and the volume of stock movement at any given time. To get a good feeling for how stocks are or will be performing, brokers and firms will add stocks to a watchlist and track them for months to understand their movement in the trade.

This process requires the investor to keep track of trends and numbers over long periods of time; however, machine learning has begun to take over some of these steps. AI technology now provides investors with the market analysis history for potential investments, giving them the information they need to make data-driven decisions. The algorithms gauging market trends are able to simplify the process of gathering the information needed to make calls about future stock performance.

Although machine learning technology is able to make better and faster predictions based on data, there is an increased need for people who are able to make judgement calls. AI can interpret new information and analyze it against the context of stock market movement in the past, but it’s not capable of predicting market outcomes for information that it does not have or that hasn’t happened yet. This means people will continue to have the role they’ve always had, which is to find unique insights that will determine the data that is yet to come.

Career Planning Changes

Although machine learning is able to efficiently process massive amounts of data for the stock market, investors and stock brokers still need to be able to analyze data themselves. There are often hundreds of thousands of dollars weighing on these investments, and that’s not the kind of money anyone wants to leave in the balance of anything purely automated. The role of AI in stock market analysis simply gives data specialists a more particular role now that machine learning is handling data history for them.

Data specialists will become even more important to using quantitative information to improve business processes, and it will be responsible for ensuring that AI-assisted decision-making is reliable. Financial managers will become more necessary in providing analytical advice based off the information available to them and the financial systems.

Stock market analysis has changed with the implementation of AI, but rather than replace humans, this technology has simply opened the door for people to delve further into what human insight can offer. Technology has long been used as a tool to process and store information, and machine learning has extended that role by using algorithms to complete basic human tasks in analyzing the information. However, human judgement will always play the most important and valuable role of making the decisions when it comes to investments.

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