Edge is hard to find. Most people don’t have it. Studies suggest that more than 80% of day-traders lose money, Sheraz Ahmed, Managing Partner at Storm (a blockchain consultancy), told me recently. AI is quickly becoming the enemy of the stubborn-minded trader, as it is changing the crypto trading game. AI trading bots are popping up everywhere, from investment data analytics firms to crypto exchanges, and they are being used to analyze bitcoin price fluctuations, hunt for entry and exit points, assist in technical analysis, and help with macro studies.
Christopher Inks, founder of the trading group TexasWest Capital, is skeptical of the AI trading bots, considering them to be the successors to algorithmic trading bots, which have long been catnip for rookie traders seeking easy wins. Everybody and their grandmother swears that their bot has a 90% win-rate strategy, says Inks. They don’t.
Daisy, a crypto education influencer who goes by the alias Crypto Empress, works with two AI trading projects, Otto Bought and the DeFi Trading Club, and believes that AI bots will change how people take profits. Now people don’t have to be stuck at computers. AI bots are going to do it for you. All you have to do is cash out your money and do real-life things, she says.
Adrian Zdunczyk, founder of the trading group The Birb Nest, believes that the edge of a trader comes from being robotic and following reliable steps that have predictive value. He also believes that AI will eventually bring something else to the table: Pattern recognition. AI can quickly process an ocean of satellite imagery, and it can scour every single cryptocurrency and trading pair, hunting for those coveted Head & Shoulders patterns.
At some point, traders may need to be using AI or else they’ll be stuck with bow and arrows while the other armies fire machine guns. The advantage will arbitrage itself away, predicts Zdunczyk.