AI-Powered Trading: Hype vs Reality in the Age of Algorithmic Finance

The term 'AI-powered' has become ubiquitous in trading, but what does it actually mean? According to Linkmate, an AI software company focused on fintech, banking, and blockchain, by 2026, this label will tell you about as much as the term 'digital' did twenty years ago.

Linkmate identifies three main uses of AI in trading: AI-assisted trading, which involves filtering before forecasting; AI-automated trading, where the model can act; and AI-powered copy trading, a leaderboard that is not due diligence.

A recent report by FINRA warns that autonomous agents can act outside their intended authority, become difficult to audit, and make bad decisions when they lack sufficient domain knowledge.