One of the newer players in the forex and CFDs broker market, fintech startup Capital.com, has added a distinguishing feature to its trading platform. The firm has been preparing a trader assistant that extends to clients smart advice based on their behaviour. The company developed the tool using artificial intelligence.
Traders typically become entrenched in behavioural patterns that prevent them from realising gains on the market. According to Capital.com, the technology the firm develops is tracking the behaviour of the traders. By detecting cognitive biases in their trading patterns, the software provides tailored educational materials in order to help clients to get better at trading.
The COO of Capital.com, Anastasiya Akula, said: “By harnessing the power of AI, particularly through the app’s advanced SmartFeed function, Capital.com seeks to educate and inform users. We promote a thoughtful, intelligent, and sophisticated approach to trading, while helping to expand market access.”
“Say you purchased an Apple stock, it grew a bit, then you sold it. You did the same three times. You start feeling that you know everything. You put all your money in Snapchat shares — which unfortunately drop in price and cause you to lose everything. This is overconfidence bias, which the SmartFeed technology can detect and address,” she explained.
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Psychological and neuroscience research demonstrated over the years that cognitive biases are very damaging to trader results. Our brains function in a different way when money decisions are involved and distant patterns in behaviour lead to different mistakes.
Traders are struggling with keeping their profitable positions open long enough, while having no issues with sticking with the losing ones.
Capital.com’s SmartFeed capabilities expand to detect disposition, martingale and loss aversion biases. The company is already working to integrate other aspects of human behaviour into its algorithm.
SmartFeed learns patterns and detects cognitive biases. When the pattern is identified tailored content including feature articles and educational material written by professional financial writers and psychologists is presented to the trader. While the trader still needs to do his/her fare share of work to remove the biases, the solution from Capital.com is a step in the right direction when it comes to trader education.
The CEO of Capital.com Kira Bondareva added: “SmartFeed is seeking to create smart traders by targeting biases and is set to revolutionise the way we make trading decisions.”