• As increasing numbers of investors are using apps to trade stocks and ETFs, AI tools are giving users an edge in knowledge, timing and managing risk
  • Financial research points to apps using AI as being effective ‘co-pilots’ for investors
  • Among the AI-powered apps designed for Australians, moomoo offers a range of tools for trading across multiple markets at competitive fees

 

Special Report: More than one in five investors now effectively carry a trading room in their pocket thanks to the booming power and proliferation of trading apps.

Some of those apps offer the added edge of AI-powered tools, which until very recently were available only to institutions with the deep pockets to develop them. These tools analyse huge amounts of data super-quick to help investors make smarter, more informed trades.

Companies such as Barcelona-founded Danelfin and US-based Boosted.ai were pioneers in high-tech pocket platforms.

In Australia there are now several including eToro which specialises in enabling investors to copy successful traders and metaTrader 4 (MT4) for forex traders.

Another is moomoo, developed by Moomoo Technologies Inc for Australians which has tools that track price patterns, analyse data to indicate the sentiment for a stock, monitor market moves and more.

 

AI versus the market

Results on how well new AI-powered trading tools predict winners over human intuition and manual research is still mixed.

It also needs to be noted that the technology’s use for picking stocks is evolving more rapidly than credible financial studies are being published.

But what is emerging very clearly from well-funded research is that AI can be a great ‘co-pilot’ to help investors make more effective and prudent decisions faster.

 

Avoiding trigger-happy trades

This benefit of AI can come into play with fear-and-greed induced impulse trades that have been found to be more likely on standard trading apps.

Tracking of 15,000 transactions by customers of two large German retail banks over several years found that when investors placed trades via a non-AI-enhanced app, they were 8% more likely to buy “riskier lottery-type stocks” than on a desktop or using a broker.

The team at the top-tier Leibniz Institute for Financial Research SAFE (Sustainable Architecture for Finance in Europe) also found that deals placed via apps were 12% more likely to be for ‘past winner’ stocks, or those that had enjoyed a recent surge, meaning those investors could be getting into the trade too late.

Moomoo’s Indicator Sentiment feature helps investors avoid this trap by rapidly completing complex calculations to analyse 15 technical indicators about a particular security.

Chief commercial officer at moomoo Australia, Michael McCarthy, says the platform then condenses all the results into a simple ‘Technical Sentiment’ graphic – a semicircle with an arrow that either swings left to the bearish red side or right in the green bullish direction to the right.

 

Stock screen gets personal

An AI-powered tool that helps users drill down through the enormous volumes of financial information out there into exactly what interests them is moomoo’s Stock Screener.

That could be, for example, NASDAQ-listed stocks, and even a specific sector such as semiconductor equipment and materials.

“Users can choose the aspects of a particular company’s performance they want to see, such as market capitalisation, net profit, asset turnover and earnings-per-share. They can then save that screen so it’s an entire customised data feed just for them,” McCarthy says.

 

 

Low-cost entry to US smorgasbord

For the increasing number of local investors wanting to tap into some of the world’s most profitable stocks and sectors there are a number of platforms offering entry to US markets, with moomoo being one of the most competitive.

“Users only pay US99 cents in brokerage fees for US trades on moomoo, regardless of the size, in comparison with up to US$9.50 for a small trade and increasing amounts for larger trades on other platforms,” McCarthy says.

Just as important for many investors is the variety of stocks and ETFs they can access on a platform.

“Moomoo users can trade from more than 14,000 US equities and ETFs,” McCarthy says. “This is thousands more than most local trading platforms offer their users.

“And lastly, a big issue for Aussie investors is actually making trades on the US market which is open 1.30am to 8am AEDT. Moomoo’s AI-enhanced platform allows 24-hour trading in US stocks every trading day, so users can place an order whenever they like and don’t have to be up late or get up early to get it done.”

 

Industries at a glance

As well as homing in on a particular stock, it can be valuable for investors to zoom out to see an industry as a whole and consider how one part may impact another.

Industry Chain is a tool that’s been designed by moomoo to give its users that helicopter view.

“Just one example is the US electric vehicle industry,” McCarthy says. “The entire industry chain is available in an accessible, visual format in a few clicks. We have lithium miners such as Pilbara Minerals, battery-pack makers such as Sony, and vehicle manufacturers such as BYD, among many other stocks.

“From drones to crypto to gold to gaming, moomoo’s Industry Chain tool can be used to navigate industry value chains, giving users an holistic view of an industry’s performance and all the stocks connected to it.”

This allows investors to reallocate assets to sectors or stocks expected to perform better under changing market conditions.

In addition to these investment tools, moomoo offers virtual trading competitions and courses to help investors be better educated about markets.

 

This article was developed in collaboration with moomoo Australia, a Stockhead advertiser at the time of publishing.

The views, information, or opinions expressed in the interviews in this article are solely those of the contributing author and do not represent the views of Stockhead.

Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.

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