CFD broker, Capital.com has announced that a patent for its unique AI trade bias detection system has been approved.
Based on machine learning, the technology, branded ‘eQ’, detects cognitive biases that often prevent clients from making disciplined trading decisions. What traders believe are valid judgements may in fact be the results of effort-saving mechanisms by the brain.
Supposedly rational decisions may stem from mental shortcuts that ignore chunks of information, which can then have a significant impact on traders’ results.
- How AI can improve your trading behaviour in real time
- Machines can do it better, but they won’t win outright
Not only does the technology detect and notify the trader when they might be exhibiting certain behavioural patterns associated with a particular bias, such as overconfidence or loss aversion, it simultaneously offers targeted personalised tips and post-trade performance breakdowns to help the trader make more informed and risk-aware trading decisions in the future.
Helping clients trade smarter
The user is at the very core of Capital.com’s ethos. The company is on a mission to create the world’s most beautiful and functional trading experience. Capital.com’s award-winning platform is designed to offer the client a powerful and easy-to-use solution that deploys state-of-the-art technology to augment their decision-making.
Available on the web and mobile, Capital.com’s AI-powered system is trained to detect 35 behavioural patterns that commonly affect trading behaviour. It does this by combining several metrics, including recent trade performance and even the articles being read from the app’s News Feed. It can then provide personalised feedback to help the user make smarter decisions when placing a trade, nudging clients towards educational resources that could help refine their trading approach. The end goal is to help clients keep more of what they earn – and for longer.
Making the most of eQ
According to the company’s research, the launch of the eQ system in January 2019 significantly improved clients’ trade performance. By comparing the data of new clients*, Capital.com found that the number of clients who read the eQ messages and experienced closeouts was 11% lower than those who didn’t read the messages. The number of profitable newcomers to Capital.com’s platform was also higher by 6.5%, while the number of newcomers with an average win to average loss ratio of more than 0.7 was up by 10%.
The most promising result was obtained through analysing the number of newcomers who made their first trade a month before launching the eQ system. Among clients who read the eQ messages, the number of profitable clients was higher by 12% and the number of newcomers with an average win higher than their average loss was higher by 11%.