Trading is the buying and selling of items in the financial market; in financial parlance, we call these items derivatives. Trades can be short-term (inter-day), medium-term (several days), or long-term (several weeks or more). According to experts at JP Morgan Chase, one of the largest banks in the world, AI applications are proven to be better suited than humans at short and medium-term trading strategies. In this section, we'll explore some fundamental strategies for developing intelligent trading algorithms for short and medium- term trades. But first, let's cover some basic concepts.
Trading strategies seek to exploit market inefficiencies in order to make profit. One of the core policies in algorithmic training is called alpha, which is a measure of performance. Alpha measures the active return on a specific investment by matching a stock...
