Algorithmic Trading in Financial Markets with Artificial Intelligence

Abstract

Artificial Intelligence (AI) has revolutionized algorithmic trading by transforming it from static, rule-based systems to adaptive and data-scented methods. This paper discusses the ways in which AI—machine learning, deep learning, neural networks, and reinforcement learning—are embedded in modern trading platforms. Findings show that AI-driven systems perform better than traditional models in pattern detection, real-time market analysis, and adaptive decision-making. They will provide more strong risk based returns and almost 70% of market volume comes from algorithmic systems. The world level algorithmic trading market, at $15.5 billion in 2021, is believed to grow at 12.2% CAGR in 2030. The advantages of very quick executions, buying and selling without emotions, and constant market watching are well understood, strong fitting to risks, unpredictable outcomes, regulations and systematic risks are present. This research says that AI will continue to reform the algorithmic trading, guiding in a kind of efficiency and effectiveness as well as new risk management requirements.