Your artificial intelligence (AI) analyzes the stock market almost around the clock. Over the weekend, it processes this data and trains itself to be optimally prepared for the new trading week.
But what exactly is a data point for AI? A data point can be thought of as an observation at a specific point in time.
Here is an example: The DAX was exactly at 15,672 points at 9:00:00 on Friday, July 16, 2021. The observation was therefore the DAX value of 15,672 points at the specified time. Each further price change before or after 9:00:00 thus represents another data point.
As a result, several million or probably even billions of data points are generated every minute on the stock market. Those who now have a good overview of this enormous amount of data can gain an advantage, as it allows them to better estimate where the stock market is headed. This enormous amount of data is also widely referred to as "Big Data" (1). Hedge funds, for example, have been using these huge amounts of data for years, as BaFin has shown in its report Big Data trifft auf künstliche Intelligenz (2). Humans can hardly process this enormous amount of data. Even your AI cannot process several billion data points per minute at the moment, but much more than a human.
In order for your AI to decide whether the German stock market or the DAX is rising or falling, the AI must observe data that has a connection to the DAX price. Therefore, your AI does not need to analyze several billion data points per day, but only data points that influence the DAX. These are, as shown in the dashboard, several tens of thousands or even several hundreds of thousands of data points per day. The counter increases over the course of the day, as your AI analyzes a batch of data every 30 minutes or so. If the analysis of the data now shows that the DAX will rise, the AI automatically buys securities for you, which will also increase in value and then sells them in the best case with profits for you. The result of the data analysis (DAX will rise/DAX will fall) is displayed in the dashboard under "Today's trend for the German stock market" displayed. This Big Data thus provides the basis for the daily trading decisions of your AI and enables data-based decisions without emotions.
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