The confrontation between humans and artificial intelligence is the subject of many films about the future. However, this technology is already working among us. So, who will win this fight? And what about traditional and AI crypto trading? To answer this question, it is worth having a closer look at the advantages and disadvantages of using artificial intelligence to trade on financial markets.

What Can AI Do in Crypto Trading?

Artificial intelligence acts according to the parameters specified by the investor. Therefore, the algorithm can perform a certain list of actions, such as:

• buying and selling assets;
• consulting, including investment portfolio diversification;
• assessing market trends;
• research and analysis of major tendencies;
• forecasting price movements in the future;
• providing information on investment opportunities that may be of interest to a trader;
• the possibility of using different types of AI-based bots, depending on the field of activity.

What Are the Disadvantages of Using AI for Trading?

These specialized computer programs are designed to perform automated tasks on behalf of the trader. They cannot react adequately in non-standard situations, the specifics of which have not been explained to them beforehand. It is important to remember that only reliable and licensed programs should be used for trading. They work more efficiently.

It is also worth knowing that regulations on the use of artificial intelligence may differ in different jurisdictions. Therefore, before starting active AI trading, it is important to familiarize yourself with the laws of the markets and countries where you intend to operate. It’s also important to remember that market manipulation using artificial intelligence and insider trading is prohibited in every country where it is possible.

However, the main disadvantage of artificial intelligence is that it is used too often, as many investors today prefer AI trading. This leads to many similar decisions. After all, the algorithm reacts to the same signals in the same way. As a result, such actions can negatively affect not only the trader’s profits but also the entire market.

The Main Advantages of Artificial Intelligence for Trading

AI-based technologies are constantly evolving and expanding, as is the list of their advantages. Let’s have a closer look at them.

1. The ability to use different types of bots for different areas of activity. For example, crypto bots are ideal for trading in cryptocurrency markets, while forex bots are better suited for working in the currency markets. There are also arbitrage bots, programs for leverage and margin trading, advisory bots, and market makers.
   
2. Processing large amounts of data to make the most efficient decisions. AI uses machine learning, historical data, and analysis of information from news and social media. Thus, the time for building trading strategies is significantly reduced.
   
3. Quick response to market changes, as the necessary order is generated immediately.
   
4. Qualitative analysis of possible risks.

Today, artificial intelligence is an effective assistant to humans in many areas of activity. However, it cannot completely replace people. AI helps traders create trading strategies and quickly implement them. At the same time, control over asset behavior should remain with the investor. Therefore, a clever combination of trader activity and artificial intelligence can yield the most positive results.