Advantages and disadvantages of aI-based trading and investing versus traditional methods

Artificial intelligence (AI) is one of the most discussed topics in finance. AI is expected to learn and execute more efficient decisions and perform more than routine and repetitive tasks. Researches have shown that AI is already dominating and outperforming humans in some financial corporations. The research was aimed to find the profitability of traditional versus AI-based approaches in trading and investing in the financial market. Building on existing work on AI trading and investing, asks: what are the advantages and disadvantages of using AI in trading in financial markets? Furthermore, how effective or risky AI-based trading versus a traditional approach is?, Considering expenses and maintenances. In this research-based thesis, a literature review on using AI in trading and investing and theories of chaos and automata, an online AI-based trading platform, a TEDx presentation, and an interview with a software engineer was presented. Analysis of the above material demonstrated that traditional trading methods take much time to collect data and make strategies by analyzing it, which is time-consuming. While an AI trading system is expensive to develop, it can explore vast data and make more and better results once built, for example, picking stocks quickly. The results indicated that artificial intelligence does have a huge impact on trading and investing in financial markets. While it is expensive to invest in it as an individual or small company, at the same time, it is proven to be more profitable for big finance companies. Applying AI and its applications in different AI-based methods vary according to various financial markets’ stocks and assets. Different time frames and small changes while scaling the AI-methods results in different outcomes; therefore, further research is demanded to identify specific data patterns on particular sections that could prove AI trading and investing effectiveness in more precision