Quick look at Algo Trading VS AI Investing

Is there a difference between Algorithmic trading and the Algorithmic Intelligence used at iFlip? Are there any similarities? Let’s compare the two.

What is Algorithmic Trading?

Your search engine will quickly bring up over 9.4 million entries when “algorithmic trading” is typed in! You won’t want to take the time to research each entry to find the exact definition of algorithmic trading. However, you will find most will give an explanation similar to what Investopedia offers.

“Algorithmic trading is a process for executing orders utilizing automated and pre-programmed trading instructions to account for variables such as price, timing and volume.”

“In recent years, the practice of do-it-yourself (DIY) algorithmic trading has become widespread. The practice has been made possible by the spread of high speed Internet and the development of ever-faster computers at relatively cheap prices. Platforms have sprung up in order to serve day traders who wish to try their hand at algorithmic trading.”

An article in the Robust Trader will tell you algorithmic trading is profitable, provided you get a couple of things right. “These things include proper backtesting and validation methods, as well as correct risk management techniques. It also increases your chances of becoming a profitable trader.”

A blog on Catana Capital says, “Algorithmic trading strategies follow a rule-based system to select trading instruments, identify trading opportunities, manage risk and optimize position size and capital use. In most cases, systems are automated so that entries and exits are executed by the algorithm, too.”

Algorithmic trading is geared towards traders with some computer skills. They can design the algorithms to follow the rules they set up. But who’s to say their rules are proven profitable?

What is AI Investing?

Algorithmic trading sounds similar to the Algorithmic Intelligence (AI) Investing used at iFlip. “The best AI retirement and stock investment trading technology uses algorithmic portfolios that automate all trades for you (buy, sell and hold).”

Three parts of the best algorithmic trading software make AI at iFlip different from DIY Algo trading.

  1. First, every day, AI looks at how the market performed, and tells the system to buy, sell or hold stock positions. This is better than merely trying to manage risk.
  2. Every day, when the market opens, AI will run a daily analysis and trade based on its results. This doesn’t mean the software will trade for you every day.
  3. The most important part of the algorithmic trading software is automation because everything runs automatically. You don’t have to worry about technical analysis, AI rule changes, on-demand trading execution, any technology maintenance, or returns reporting. The best automated trading software does it all for you.

Why would you want to hope Algo trading might pay off when iFlip’s AI has proven results?  

See results from the 2020 crash. 

The market isn’t always going to go up, so you need to be able to lose small in order to win big. Using Algorithmic Intelligence at iFlip is how you can outperform the average investor.

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Zero-dollar ($0) commissions are available for self-directed Individual cash or margin brokerage accounts that trade U.S. listed securities via mobile devices and via web interface. To obtain the commission and fee schedule, please see our website at www.iflipinvest.com. Note that certain Flip Investor Inc. Product features listed are currently in development and will be available in the near future. System execution price, speed, response time, liquidity, market information, and account access times are affected by many factors, including market volatility, size and type of order, market conditions, system performance, and other factors. Some of the information provided show hypothetical results which may or may not represent live performance. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns.  Keep in mind that while diversification and the use of algorithms may help manage risk it does not assure a profit, or protect completely against losses, in a down market. There is always the potential of losing money when you invest in securities, or other financial products.  Investors should consider their investment objectives and risks carefully prior to investing.

Past performance is not indicative of future performance. iFlip data results assembled using various Flip algorithms applied to the equities listed on this webpage (if any). Results compiled for each equity and each algorithm assume a 10,000 initial investment beginning on Jan 1st 2005. A $0.01 / share commission applied. All iFlip price assumptions are based on the opening price of each day as found in Yahoo finance. Yearly NAV data points compiled by compounding annual returns using standard year over year accounting. S&P500 results are derived using the SPY as a proxy. The data on this webpage is not intended as a solicitation. Always seek professional advice for suitability.

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