AI Trading
Monetize this groundbreaking innovation
Are you looking to capitalize on one of the biggest technological developments in the history of mankind? Jump on the AI train with Oxido Solutions and grow your wealth with our AI-driven trading bot solutions.
GET READY TO ENTER THE AI KINGDOM
Long before the recent AI trading hype spurred by ChatGPT, Oxido Solutions was already using artificial intelligence in our trading strategies and key elements of our IT infrastructure, such as our middleware and hosting. This has given us a head start in understanding the opportunities and challenges that this technology brings to the financial markets. We notice that AI is a buzzword that isn’t clear to everyone, especially how it can help digital asset traders succeed.
To make your learning easier, we’ve put together a unique content program for you. It covers ten essential topics:
What is AI TRADING?
Artificial intelligence
To understand what AI trading entails, we first need to define Artificial Intelligence. At its core, AI is a term that includes a variety of subtypes, which we will define later. However, fundamentally, AI is a simulation of human intelligence processes by machines, specifically computer programs. These processes include three steps: learning (the acquisition of information and rules for using this information), reasoning (using rules to draw approximate or definite conclusions), and self-correction. In simple terms: Artificial Intelligence is like teaching a machine or a computer to think and learn like a human. Every subtype of AI embodies a unique method to empower a machine or computer to mimic human thought processes.
Application financial markets
AI trading is one of the most popular applications of AI. It refers to the practice of utilizing artificial intelligence technologies to devise trading strategies for the crypto market, stock market, and other financial markets. This emerging field merges advanced AI techniques like machine learning, data analysis, and predictive modeling to create trading opportunities with minimal human intervention.
AI trading systems
AI trading systems are designed to analyze vast amounts of financial data, including historical price patterns, market trends, news articles, and social media sentiment. By leveraging powerful computational capabilities, these systems can quickly process and interpret complex data sets, identifying potential trading opportunities accordingly.
Jarno’s take on AI trading
As our Chief Technical Officer, Jarno de Vries holds responsibility for all technical aspects within Oxido Solutions. He is the creator of our trading bots, the underpinning IT infrastructure, and Alpha Shifter, our middleware layer. To maintain our leading edge in the trading space, Jarno keeps a close eye on AI trends. This focus has shaped his unique perspective on AI trading.
Transforming finance
Over 80% of all trades are driven by computers, and with the latest AI advancements, this percentage is set to rise rather than decline. This dynamic will make it increasingly challenging for manual traders to achieve success and will require investors to stay updated on the latest AI trends. Those already employing algorithmic trading strategies must, at the very least, continue testing new AI applications. This will ensure they have an alternative if the tech behind their current strategies becomes obsolete.
DIVERSIFICATION
Anyone involved in algorithmic trading should aim to have a diversified portfolio of various trading strategies that ideally hedge each other as much as possible. This increases the chance of stable profits and decreases the chance of significant losses. Take, for instance, an AI-driven strategy that produces trading alerts based on a complex set of real-time social media data. This could serve as a hedge for a rule-based strategy that identifies trading opportunities based on fewer parameters and less data.
OXIDO SOLUTIONS
The rapid advancements in AI trading make everyone’s role at our company more engaging yet challenging to stay abreast of all developments within our three key verticals: Trading, IT, and Legal. Our trading setup and corresponding architecture must be constantly tested and adapted to meet the latest AI innovations. Furthermore, AI legislation impacts our legal services. Consider, for example, how to handle the intellectual property of a strategy partly developed with ChatGPT.
SHOWCASE
WALKTHROUGH
SPOT VS DERIVATIVES EXCHANGE
In order to make a profit with an AI trading strategy, exchanges and broker platforms play a crucial role. These platforms enable AI trading of digital assets between buyers and sellers. Ideally, they provide a user-friendly interface, sufficient liquidity, and a reliable way to exchange data. This can be done through an API connection, which allows large amounts of AI trading data to be exchanged quickly and accurately. There are two main types of exchanges: Spot and Derivatives. Selecting the right type for your AI trading bot is crucial, and understanding the differences between Spot and Derivatives exchanges can guide your choice.
However, it’s important to note that as a non-financial entity, we do not provide specific trading advice or evaluate your trading qualifications. We strongly encourage you to conduct your own in-depth research and seek advice from a finance professional.
| SPOT | DERIVATIVES | |
| Definition | Buying and selling of digitals assets | Buying and selling of financial contracts |
| Contract types | Spot | CFD's, perpetual futures, options |
| Collateral | Digital asset | Different types of digitals assets |
| Leverage | NA | Amplify profit or loss with leverage |
| Trading fees | Higher | Lower |
| Risk management features | Less | More |
| Trading fees | Transaction fee | Transaction fee, liquidation fee, funding fee |
| Hedging | Not supported | Supported |
AI TRADING DATA
Comprehensive and reliable data is at the heart of a successful AI trading bot. It’s vital to have access to thorough and trustworthy data for a winning AI strategy.
Trading data comes in two forms: historical and real-time. Historical data lets you look back and see how your strategy would have played out in the past, offering precious insights. Real-time data, on the other hand, is essential for successful live trading. Up-to-date information is key to making well-informed decisions and adjusting to the present market conditions.
Historical price data
REAL-TIME PRICE DATA
HISTORICAL TRADING VOLUME
REAL-TIME TRADING VOLUME
ORDER BOOK DATA
TRADING FEES
EXCHANGE DATA
TECHNICAL INDICATORS
FUNDAMENTAL DATA
DESIGN APPROACH AI TRADING BOTS
When it comes to developing an AI trading bot, you’ve got three main approaches to choose from: technical analysis, fundamental analysis, or a mix of both. To guide you in picking the best approach, let’s explore the key differences between technical and fundamental methods by providing examples of AI bot applications.
TECHNICAL ANALYSIS
Analysis of quantitative data based on technical indicators.
DATA COLLECTION
The AI bot would start by gathering extensive historical price data. This data forms the basis for the AI’s training and learning process.
PATTERN RECOGNITION
Using Deep Learning techniques – specifically, a type of neural network known as a Convolutional Neural Network (CNN) – the AI bot is trained to recognize specific patterns in the data. CNNs are particularly suited to pattern recognition in visual data, making them perfect for identifying chart patterns in price data.
DECISION MAKING
Once trained, the AI bot can then analyze real-time market data, recognizing the patterns it has been trained to identify. When a pattern is recognized, the bot uses this as a sign to generate a trading opportunities. For example, if it recognizes a “Head and Shoulders” pattern, which is typically a bearish signal, it might decide to provide a sell alert.
CONTINUOUS LEARNING
The AI bot also continues to learn and adapt over time. As it receives new data and feedback, it adjusts its own internal model to improve its pattern recognition and trading decisions. This process, known as backpropagation, is a key part of the machine learning process.
FUNDAMENTAL ANALYSIS
Analysis of qualitative data with fundamental indicators.
DATA COLLECTION
The AI bot first gathers extensive textual data, including company reports, financial news articles, social media posts, and more.
TEXT & SENTIMENT ANALYSIS
Utilizing Natural Language Processing (NLP), an AI field that interprets human language, the bot can comprehend and extract meaning from textual data. A specific NLP feature, Sentiment Analysis, allows the bot to determine whether the expressed sentiment about a stock is positive, negative, or neutral.
DECISION MAKING
Based on the sentiment analysis, the bot can make informed trading decisions. For example, if the bot determines that the overall sentiment for a particular company is increasingly positive, it could decide to create an alert to buy shares in that company, anticipating a potential price increase.
CONTINUOUS LEARNING
Through Machine Learning techniques, the AI bot is not only able to make decisions based on current data, but it can also learn from past actions and improve its decision-making processes over time. This process of continuous learning helps the bot to adapt to new information and changes in the market environment.
AI TRADING BOT CODING SKILLS
When it comes to getting an AI trading bot, you have options. Some platforms and providers offer ready-made AI bots that you can buy and configure to fit your needs. In such situations, you don’t really need to know how to code, but it helps to understand how your bot works. If, however, you’re keen on creating your own AI trading bot, you’ll need solid coding skills. Coding languages fall into two categories: closed-source and open-source. Closed-source languages are platform-specific, while open-source ones can be used across various platforms. Knowing these categories can help you decide the best way to develop your trading bot.
Closed-source
Open-source
Pinescript
PineScript is a programming language based on C, offered by TradingView, a popular charting platform for creating artificial intelligence trading bots. With PineScript, you can create your own AI strategies and custom technical indicators that match your trading style.
MetaTrader5
MetaTrader5 (MT5) is a closed platform that a lot of developers use to build AI trading bots. With MT5’s software kit, which is based on the Python programming language, developers can create personalized AI bots and indicators that perfectly mirror their unique AI trading strategies.
Python
If a closed platform doesn’t provide the necessary tools for making an AI trading bot, you can opt to create a strategy from scratch or use open-source libraries. Python is the go-to-programming language for machine learning and gives you plenty of options for developing your own tailored AI trading bot.
JavaScript
JavaScript is an open-source language that’s relatively easy for beginners to pick up. However, it might not be the best choice for creating AI trading bots that focus on high-frequency trading strategies like arbitrage or market making, which demand superior speed and performance abilities.
Your email:
OUR AI MIDDLEWARE TRADING SOFTWARE
At Oxido Solutions, we found that existing middleware solutions fell short of our precise AI trading needs. In response, we decided to develop Alpha Shifter, a state-of-the-art middleware trading system. It effectively transmits buy and sell signals from various AI trading strategies to any specified endpoint. Recognizing the growing demand for a robust enterprise middleware layer among hedge funds, family offices, banks, and other professional entities within the finance sector, we’ve decided to offer Alpha Shifter as a standalone software solution. Here is a list of the key features:
PERFORMANCE
OUR AI TRADING BOT STRATEGY
Building a successful AI trading strategy needs both skill and experience. If you’d like to avoid the detailed work of creating and managing your own AI bot strategy, you might want to consider using the AI trading strategy from Oxido Solutions. It’s packed with innovative features aimed at improving your chances of success in the financial markets. Here’s why our artificial intelligence strategy is special:
Trend-following
Our AI trading strategy is built around a trend-following approach, where we keep a close eye on the direction of market trends. We firmly believe that if an asset is moving in a certain direction, it’s more likely to keep moving that way rather than make a sudden switch. This lets us take advantage of both rising and falling market trends. To spot and track these trends effectively, our AI bots use advanced technical and fundamental analysis as well as artificial intelligence.
3 risk levels
Our AI trading strategy offers three risk levels: low, medium, and high, which match risk levels of 2%, 4%, and 6% of the trading capital per trade. Keep in mind that these calculations don’t factor in slippage, the gap between the expected price of a trade and the price at which it actually executes. The low-risk level aims for smaller profits but also experiences smaller drops, giving a more cautious approach to AI trading.
Range Maker
In 2017, Jarno developed the Range Maker, a trend-following trading algorithm that became available to the public in 2019. Unlike other algo traders who depend on common methods like Bollinger Bands to set the trading range, we’ve taken a unique path. Our way of calculating the trading range, combined with custom features, ensures steady stability and makes it less susceptible to market manipulation.
In 2020, we rolled out another AI trading bot: the Average True Range (ATR). The ATR algorithm is designed to respond quickly to minor trend movements and excels over shorter timeframes. By pairing the ATR with the Range Maker, we boost the monthly performance of our strategy, as they provide a safety net for each other. This combined approach allows our AI bot to adapt more effectively to shifting market conditions.
The sideways filter is an advanced technical indicator that tackles one of the biggest hurdles in our industry. While trend-following strategies often do well in strong trending markets, they can struggle during times of choppy price action. The sideways filter measures the market’s strength effectively and adjusts our algorithms to match. When the market’s trend is weak, it stops our strategies from taking positions. This groundbreaking feature has reduced our strategy’s drawdowns by up to 50%, boosting its overall performance.
One issue with trend-following trading strategies is the risk of over-optimization. This occurs when strategy parameters are adjusted too closely to historical market data, leading to a drop in performance when applied to new, unseen data. Traders often run into this problem when they continually fine-tune the strategy to fit the past data perfectly. To avoid this, our strategy supports continuous learning, a machine learning-based function that dynamically adjusts the algorithm parameters based on current market conditions. This flexible approach ensures steady performance in changing market landscapes.
LIVE DEMO
AI CRYPTO TRADING BOTS
If you’re looking for a simple and effective way to take advantage of the volatility of the cryptocurrency market, Oxido Solutions’ AI-driven crypto trading bots might be what you need. They can find the best buy and sell opportunities for crypto derivatives. This could help you earn extra income on the top three cryptocurrency derivative exchanges: Binance, Bybit, and OKX.
Signal service
To receive AI trading opportunities for crypto derivatives, you can subscribe to our signal services for Binance trading bot, Bybit bot, and OKX bot. Our AI crypto trading robot detects opportunities, sends them to a middleware layer, which then forwards them to your crypto account for you to manually turn into orders. We cannot automate the conversion of these opportunities into orders because we are not a financial institution. However, you can allow your crypto broker to turn the signals into orders through their API.
Trading pairs
Our AI bots only create buy and sell opportunities for Bitcoin and Ethereum Derivatives trading pairs. We focus on these due to their high liquidity, which is vital for smooth and efficient trading. Furthermore, the rich historical price data for these specific trading pairs lets us do thorough backtesting, ensuring our crypto trading bots’ trustworthiness. For example, even before we started collecting live data in 2019, our backtesting showed that our AI crypto bots were doing very well.
Perpetual Futures
Our AI cryptocurrency bots produce trading opportunities for perpetual futures, also known as perpetual swaps. This derivative product lets you speculate on future asset prices without expiry dates, unlike traditional futures contracts. There are two types: BTC-USDT-SWAP and BTC-USD-SWAP. If you prefer to earn more USD Tether stablecoins rather than Bitcoin or Ethereum, choose BTC-USDT-SWAP and provide USDT for our crypto signal service. Or if you want to use Bitcoin as collateral and gather more of it, go for BTC-USD-SWAP.
Isolated margin
Oxido Solutions’ crypto AI robots are built to find opportunities that include isolated margin, a helpful feature that assists you in managing the risk of each individual trade. It’s like setting aside a specific amount of money for different expenses. With isolated margin, you assign a particular amount of funds for each trade and only use those funds for that trade. This ensures that a trade that doesn’t perform well won’t impact the rest of your trades, giving you better control over your risk.
AI TRADING SIGNAL PLANS
Ready to take the next step? With Oxido Solutions’ signal service, you can receive AI-driven buy and sell signals to help you generate extra income on your preferred exchange and asset class. You can receive the signals by email, Telegram, API or any other preferred channel. Please be aware that as a non-financial service provider, our signals are not customized, and all subscribers receive the same signals. We also do not execute orders on your behalf. We believe in our AI robots and are happy to give you a free trial for 14 days. If you’re satisfied with the signals, you can move to a paid subscription with us.
TRACK RECORD
RISK MANAGEMENT
UNIQUE
STABLE
FAST
DYNAMIC
ENTERPRISE-READY
SUPPORT
COMPLIANT
LET’S CHAT
