What happens if all people use the same AI trading algorithm?
AI trading algorithms have become increasingly popular in the financial markets.
They are used to make decisions based on data and can be used to predict market trends. But what happens if everyone starts using the same AI trading algorithm?
The use of the same AI trading algorithm by all traders could lead to a situation where everyone is making the same decisions and thus, creating a situation of market stagnation.
This could lead to reduced liquidity in the markets as well as increased volatility due to lack of diversity in decision-making.
Moreover, it could also lead to increased risk for individual traders as they would be exposed to higher levels of risk than before.
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