Module 7: Execution & Using AI Trading Tools Flashcards
Question: What is a brokerage platform?
Answer: A brokerage platform is an online tool that allows traders to buy and sell stocks, options, and other financial instruments.
Question: What are the most common order types?
Answer:
Market Order: Executes immediately at the current price.
Limit Order: Executes only at a specified price or better.
Stop-Loss Order: Sells a stock when it reaches a set price to limit losses.
Trailing Stop Order: Adjusts dynamically to lock in profits.
Question: What is slippage in trading?
Answer: Slippage occurs when an order is executed at a different price than expected due to fast-moving market conditions.
Question: What is AI-assisted trading?Answer: AI-assisted trading uses algorithms and machine learning to analyze market data and execute trades automatically based on set parameters.
Answer: AI-assisted trading uses algorithms and machine learning to analyze market data and execute trades automatically based on set parameters.
Question: How do AI trading tools help traders?
Answer: AI trading tools help traders by:
Identifying trading opportunities faster.
Reducing emotional trading decisions.
Automating trade execution.
Analyzing large datasets for better predictions.
Question: What are some popular AI trading platforms?
Answer: Popular AI trading platforms include Trade Ideas, Tastytrade, TrendSpider, ThinkorSwim, and Interactive Brokers’ AI tools.
Question: What is backtesting in trading?
Answer: Backtesting is testing a trading strategy using historical data to see how it would have performed in the past.
Question: How can AI improve trade execution?
Answer: AI can optimize order placements, reduce slippage, and execute trades at the best possible prices using real-time market analysis.
Question: What is high-frequency trading (HFT)?
Answer: High-frequency trading (HFT) is a type of algorithmic trading that executes thousands of trades in fractions of a second to exploit small price differences.
Question: How does algorithmic trading work?
Answer: Algorithmic trading uses pre-programmed rules based on price, volume, and timing to execute trades automatically.
Question: What risks come with AI trading?
Answer: Risks include over-reliance on automation, potential malfunctions, lack of human oversight, and market unpredictability.
Question: How do traders use AI for technical analysis?
Answer: AI scans charts for patterns, trends, and breakout signals faster than human traders can.
Question: What is sentiment analysis in AI trading?
Answer: Sentiment analysis uses AI to scan news, social media, and financial reports to gauge market sentiment and predict price movements.
Question: What is a trading journal, and why is it important?
Answer: A trading journal is a log of past trades used to analyze performance and improve future decision-making.
Question: How can traders combine AI with personal analysis?
Answer: Traders can use AI for trade ideas and market scanning but should apply human judgment for risk management and final decisions.
