Most investors will know the disposition effect well, even if many are powerless to fight it. It describes the tendency for holders of falling assets to hang on to them, while also encouraging the lucky owners of rising assets to sell out – often earlier than they should.
But new research suggests that artificial intelligence (AI) can make FX traders better than natural intelligence allows. By collecting large amounts of data and analyzing and mapping it in real time, AI is providing a heuristic function, helping traders to avoid repeating past mistakes.
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