Utilizing AI and Big Data to Revolutionize Algorithmic Trading in Financial Markets

Abstract

This study examines the profound influence of incorporating Artificial Intelligence (AI) and big data into algorithmic trading on financial markets, with a specific emphasis on its impact on market efficiency, liquidity, and price discovery. The research utilized quantitative approaches to evaluate the relationships between technology breakthroughs and major market indicators, using a sample of 200 professionals from the financial industry. The findings revealed strong positive correlations: AI technology had a strong connection with market efficiency (r = 0.65), whilst big data integration displayed a high correlation with decision accuracy (r = 0.70). Furthermore, the effect of AI on the swiftness of trade execution was significantly robust (r = 0.80), and its impact on price discovery was favourable (r = 0.60). The results emphasize the significant impact of AI and big data in improving the efficiency, accuracy, and speed of trading. They also draw attention to the advantages of these technologies as well as the current obstacles in achieving market transparency and stability.