I have spent over two years exploring this question. My Google searches and countless GPT conversations have been focused on ways to use AI models to predict the next candle or swing in the forex market.
In this article, I’ll share my insights to help you approach this topic effectively and avoid wasting time on unrealistic expectations.
What Drives Financial Market Movements?
Based on my experience and various books, forex market movements are often described as chaos. In a chaotic system, it’s possible to predict the next outcome with a decent win rate. However, the main obstacle is that this chaos is influenced by human emotions, order flow manipulation, geopolitical events, and other fundamental factors.
Can We Predict the Next Market Move by Considering All Variables?
No. Since the dawn of humanity, no one has been able to accurately predict even a single human emotion, let alone the complex interplay of market factors.
How Does a Profitable AI Trading Bot Work?
Does This Mean AI Is Useless in the Forex Market?
Absolutely not! AI can enhance trading—but only if used correctly. Many traders believe reinforcement learning AI will “print money” for them. In reality, such systems often fail in live markets, sometimes performing worse than a beginner trader attempting an FTMO challenge.
It’s also a common misconception that candlesticks are continuous numbers that can be predicted using Fourier transforms, wavelets, or Markov chains.
AI is not here to change the fundamental reality of the market—it’s here to enhance your decision-making and trading strategies.
How Can AI Improve Forex Trading?
- As an Advisor, Not a Trader: Use AI to learn from your trading actions and provide recommendations, such as whether to continue trading or stop. It can also suggest volume levels based on your trading history.
- Market Condition Insights: AI can explain market conditions in real time, helping you focus on key elements that matter in the moment.
- A Missing Piece of the Puzzle: When I began using AI and data science to analyze and improve my trading conditions—not to trade or “print money”—I realized it was the missing piece I had been searching for.
Avoid Unrealistic Expectations
Stop using bots or so-called “expert systems” that claim they can print money using AI. Instead, experiment with innovative approaches that go beyond what “Fake Content Creators” teach. Avoid relying on videos promising quick riches, such as “AI created this strategy and made $4,000 in a day.” Most of these are made by inexperienced individuals looking to sell you false hope.
Final Thoughts
To truly benefit from AI in forex trading, use it as an assistant and advisor. Invest time in learning the fundamentals of AI by reading books instead of consuming poorly made videos. AI is not a shortcut to wealth, but a powerful tool to enhance your trading strategies and decisions.
Peters Report Finds Hedge Funds Use of AI in Trading Decisions
