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KGI: 2025 Market Outlook

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Balancing Global Dynamics

HONG KONG SAR – Media OutReach Newswire – 4 December 2024 – Today, KGI has released its 2025 Market Outlook, covering regions including Mainland China, Hong Kong, Taiwan, the U.S., Singapore, and Indonesia.

(From left) Cusson Leung, Chief Investment Officer at KGI; James Chu, Chairman at KGI Securities Investment Advisory; James Wey, Head of International Wealth Management at KGI; Kenny Wen, Head of Investment Strategy at KGI
(From left) Cusson Leung, Chief Investment Officer at KGI; James Chu, Chairman at KGI Securities Investment Advisory; James Wey, Head of International Wealth Management at KGI; Kenny Wen, Head of Investment Strategy at KGI

Reflecting on this year, the cooling of inflation and the labor market in the United States has brought the economy to a roughly balanced risk between employment and inflation. With Trump re-entering the White House, his policy propositions are poised to impact global economic development and shape the trend of medium and long-term interest rates. In China, domestic investment confidence remains weak. With the potential risk of the United States significantly increasing tariffs, Chinese exports may be affected. In response, China will introduce relevant measures to address these challenges.

Under this backdrop, we recommend the “ACE” strategy for 2025:

  1. Alternatives: Gold and cryptocurrencies — assets with lower correlation to traditional stocks and bonds.
  2. Credit Selection: Prioritize high-rated bonds, focusing on opportunities in corporate bonds.
  3. Elite Stocks: Prefer U.S. and Japanese stocks, maintain a preference for large-cap over small-cap, and pay attention to sector rotation.

Kenny Wen, Head of Investment Strategy at KGI, says: “Regarding asset allocation, based on our assessment of the global economy and geopolitical factors for 2025, investors can consider the ACE strategy: A is for Alternatives, which refers to diversifying into alternative assets to reduce portfolio volatility, with gold being a viable option. C is for Credit Selection, meaning carefully selecting investment-grade bonds to enhance potential income. Lastly, E is for Elite Stocks, where we prefer large-cap stocks, particularly from the U.S. and Japan.”

Macro and the U.S. Market
Within developed markets, the U.S. economy may slow down more significantly than the current market consensus estimate. In other regions, the recovery in the Eurozone and the UK was weaker than expected, but the trend of year-on-year growth is still improving. It is expected that the overall performance will still lag behind the U.S., but the gap is narrowing. In China, the market is currently focused on whether the Central Economic Work Conference in December can propose effective fiscal “stimulus” policies; otherwise, achieving 5% economic growth in the future remains challenging.

In the U.S., the manufacturing recovery has been weak, mainly due to overall weak capital expenditure. On the other hand, for the service sector, has shown unexpectedly strong performance, which has been key to the U.S. economy outperforming other mature markets over the past six months. However, with declining savings rates and increasing financial burdens, credit consumption momentum will weaken, potentially dragging on the U.S. economy in 2025.

Trump’s four major policies—tax cuts, increased tariffs, immigration restrictions, and financial deregulation—have an uncertain execution order, which may adversely affect inflation. Starting with restrictions on immigration and the implementation of tariffs, these policies are visible. Therefore, throughout the year, the four policies mentioned above may be announced in the first half, increasing the volatility of financial markets. However, higher economic risk for the United States is still in the second half of the year, and whether there will be improvement in the fourth quarter depends on the policy changes at that time.

The U.S. has returned to a roughly balanced dual-risk target of employment and inflation, with core inflation expected to continue declining in 2025. However, Trump’s increased tariffs and anti-immigration policies could lead to a resurgence in goods and services inflation, posing a risk of rising inflation again in 2026. The U.S. has returned to a state of full employment, with the unemployment rate for non-temporary jobs slowly rising, which may negatively affect the consumer spending.

In terms of U.S. stock investment, after two consecutive years driven by the AI wave, the overall U.S. stock market is no longer cheap. However, we see opportunities for sector rotation in the future, mainly reflected in estimated earnings improvements, particularly in finance, materials, industrial, and healthcare sectors. From a timing perspective, we believe the positive post-election stance can be maintained in the first quarter, but starting in the second quarter, the risks of Trump’s policies and economic downturn expectations will be reflected; risks will further increase in the second half, with the first half overall better than the second half.

As for bond investment, under Republican full control, bond investment may be adversely affected. For example, worsening fiscal deficits will increase bond issuance costs, rising inflation will lead to higher yields on medium- and long-term bonds, and poor fiscal discipline and long-term inflation risks will push up neutral interest rates and bond term premiums. Therefore, medium- and long-term government bonds are less favored in 2025, while some short-term government bonds or high-credit-quality corporate bonds, with relatively higher yields, can provide good interest income. Overall, 2025, with increased inflation risk and potential monetary policy reversal, is not favorable for bond investment.

James Chu, Chairman at KGI Securities Investment Advisory, says: “The global economy’s overall growth in 2025 is expected to be similar to that of 2024. Although the U.S. economy is showing a downward trend, it remains relatively strong among developed markets. The biggest variable for economic performance in 2025 remains the implementation of policies following Trump’s return to office; the impact of these policies on the economy might be difficult to assess immediately, but they are certainly unfavorable for inflation. The Federal Reserve is expected to cut interest rates by 75-100 basis points, potentially reaching a low of 3.75-4.0% in 2025, with rate hikes possibly resuming in 2026. In terms of investment, after being driven by the AI wave for two consecutive years, U.S. stocks are no longer cheaply valued, but there are opportunities for sector rotation. It is expected that in 2025, the S&P 500 will still see mid to high single-digit profit growth, with annual returns estimated between 6-12%, which is a decline compared to the previous two years. In terms of timing, we believe the first quarter should maintain the current post-election bullish trend. Starting in the second quarter, the market is expected to reflect the risks associated with Trump’s policies and the anticipated economic downturn, which may lead to market volatility. Risks are expected to increase further in the second half of the year, with overall performance anticipated to be better in the first half than in the second half.”

Mainland China and Hong Kong Markets
Looking back at the first three quarters of the year, the Chinese economy grew 5.3% YoY in Q1, beating the expected 4.8%, but the momentum slowed down afterwards. In Q2 and Q3, the growth rates came in at 4.7% and 4.6% respectively. This brought GDP growth for the first three quarters to 4.8%, below the government’s target of around 5%. China’s economic growth has been trending down quarter by quarter, indicating strong downward pressure on its economy. Hence the Chinese government has introduced a package of counter-cyclical policies in recent months, which include not only monetary policies such as reducing reserve requirement ratios (RRRs) and interest rates cut, but also a relatively large-scale debt-swap program to ease the stress on local governments’ budgets, to release the resources for supporting the economy.

5% GDP growth for 2025 facing lingering challenges
In fact, although the debt relief program looks sizable, but fiscal “stimulus” is lacking. China needs fiscal policy along with stimulus measures that are large and direct enough to make a difference in the medium to long term. We are expecting that China will continue to advance its medium-term policy stimulus (more rate cuts and other individual measures are possible by year-end; any large-scale incremental fiscal program might have to wait until after next year’s Two Sessions). Moreover, the upcoming focus will be December’s Central Economic Work Conference (CEWC), at which the policy setting for next year will be determined. Investors are more concerned about the impact of Donald Trump’s retaking the White House on China-U.S. relations and the Mainland economy. Tariffs have moved to the center stage while foreign affairs, finance and technology, etc. have receded slightly. If Trump insists on raising tariffs on all Chinese imports to 60%, the impact on China’s trade and economy will be significant. In short, China’s economy next year will be driven by two opposing forces: U.S. policy and stimulus efforts of the Central Government.

Overall, as confidence is yet to be restored, might have to do with China’s not-yet-returned animal spirits. In addition, the continued sluggish employment performance has led to the limited growth in wages (especially for new employees). All this is making people reluctant to spend like they did in the past. Given such stubborn structural problems, we believe that achieving a 5% economic growth rate in China in 2025 will be challenging.

Target price for the HSI in 2025: 23,200 points
Looking ahead to 2025, While the China-U.S. relationship is poised to be the primary risk factor for the Hong Kong stock market in 2025, from an optimistic perspective, the declaration by President Trump regarding a potential 60% tariff on Chinese imports may serve as a part of bargaining strategy, leaving the final tariff rates and their scope uncertain. Additionally, considering that the Ministry of Finance has indicated that further economic stimulus measures are yet to be introduced, our outlook for the market remains cautiously positive. Considering the unusually exuberant market sentiment during the HSI’s recent decline from the peak, when daily trading turnover exceeded HK$600bn at once, we believe that the index has the potential to return to the 23,200 points in 2025. In terms of market valuation, the market forecasts EPS of HK$2,210 for 2025, reflecting a YoY growth of 5.1%. Thus, the forwarded P/E corresponding to the 23,200-point level would be 10.50x, slightly above the 10-year average of 10.26x. Should the index close at 19,700 points by year-end, this would indicate a potential upside of approximately 17.8%.

This scenario is based on the following key assumptions: (1) the scale of economic stimulus measures aligns with expectations and focuses on private consumption, (2) EPS growth for the HSI maintains above 5%, and (3) the China-U.S. conflict is confined to trade-related issues only.

Three investment themes for 2025

  1. Benefiting from new policies
  2. Low geopolitical sensitivity
  3. Actively expanding business overseas

Top Picks

Name Target Price
Benefiting from new policies
CMB (3968) 43.0
PAI (2318) 57.5
Low geopolitical sensitivity
CSCI (3311) 11.9
Tencent (700) 507.0
China Mobile (941) 80.9
Actively expanding business overseas
Trip.com (9961) 625.3
BYD (1211) 319.1

Prepared by KGI

Kenny Wen, Head of Investment Strategy at KGI, says: “In light of various external uncertainties, such as the recent escalation in the Russia-Ukraine situation and Trump’s threats to significantly increase tariffs, there are potential negative impacts on China’s economy. Coupled with insufficient domestic demand, achieving a 5% economic growth rate next year may be challenging. We should closely monitor the Central Economic Work Conference in December and the Two Sessions in March next year, by then to gain more insights on, how would central government’s assess economic performance and the timeline for introducing stimulus policies. Regarding the Hong Kong stock market, while the economic and corporate earnings growth prospects in mainland China remain conversative, the Hang Seng Index’s attractive valuation and the underweight positions of foreign institutional investors suggest that the market may continue to experience significant fluctuations. Once investor confidence returns and capital flows into the market, the Hang Seng Index could potentially break through the 23,200 level seen in October this year. We recommend focusing on three main themes: (1) benefiting from new policies, (2) low geopolitical sensitivity, and (3) actively expanding business overseas.”

Taiwan Market
We are optimistic that Taiwan’s stock market in 2025 will continue the bullish trend observed in 2023 and 2024. This optimism is primarily based on the steady global economic expansion and the AI arms race, which is expected to sustain strong momentum in technology stock earnings.

While we remain optimistic about the continuation of the bullish trend in Taiwan’s stock market in 2025, the annual gains may not surpass the impressive performances of the past two years. The current AI-driven surge has already resulted in a significant increase of over 90% for the TAIEX, with the forward price-to-earnings ratio reaching as high as 21 times. Compared to previous bull markets driven by technological paradigm shifts, the current gains and valuations are approaching historical peaks. Following a 28% increase in 2023, Taiwan’s stock market once reached a maximum gain of nearly 30% so far in 2024.

We expect Taiwan’s stock market in 2025 to generally follow a U-shaped trend, with a bullish bias in the first and fourth quarters and potential corrections in the second and third quarters.

James Chu, Chairman at KGI Securities Investment Advisory, says: “Under a scenario where the U.S. economy achieves a soft landing, interest rate cuts are expected to boost risk assets. This, combined with China’s economic stimulus measures and the steady trend of artificial intelligence, supports a bullish outlook for Taiwan’s stock market in 2025. The tech industry continues to thrive, primarily driven by AI, with Taiwan maintaining its leading position in the global semiconductor sector and a comprehensive AI supply chain, which is expected to drive significant earnings growth in 2025. However, following Taiwan’s stock market with a maximum gain of nearly 30% in 2023 and 2024, and with earnings growth projected to slow from 36% in 2024 to 18% in 2025, the potential for sustained index gains may be limited. Instead, the focus may shift to individual stock performance. Domestic investors have effectively countered foreign selling pressure in recent years, providing continued support against downside risks in 2025. Meanwhile, the Trump administration’s aggressive economic and trade policies could increase market volatility but also present strategic buying opportunities.”

Singapore Market
Looking ahead to 2025, significant changes are anticipated in the global macroeconomic landscape, with the U.S. expected to overhaul key policies related to international trade, foreign affairs, immigration, and more under Trump’s administration. Rising tensions among major economies are likely. However, Singapore, with its strategic position as a trade, logistics, and wealth hub, is well-positioned to navigate these shifts. Since the onset of the trade war in 2017, Singapore has leveraged its strengths and geographical advantages to achieve consistent growth. As we move into the coming year, Singapore is poised to face both new challenges and fresh opportunities. Chen Guangzhi, Head of Research at KGI Singapore, says: “We believe Singapore will capture growth opportunities amidst the backdrop of the new round of global trade tensions and ensuing rising geopolitical risks in 2025”

Indonesia Market
We are optimistic about 2025, targeting higher economic growth of 5.5%, which is above the 10-year average of 5.1%. This growth will be driven by increased consumption and investment, a rise in civil servant salaries, infrastructure development in the Nusantara Capital City (IKN), and downstream exports, contingent on robust global commodity prices. Yuganur Wijanarko, Senior Analyst at KGI Indonesia, says: “We maintain a positive outlook for 2025, and despite upcoming challenges, anticipate significant improvements in consumer confidence and domestic demand.”

DISCLAIMER
All the information contained in this document is not intended for use by persons or entities located in or residing in jurisdictions which restrict the distribution of this document by KGI Asia Limited (“KGI”), or any other affiliates of KGI. Such information shall not constitute investment advice, or an offer to sell, or an invitation, solicitation or recommendation to subscribe for or invest in any securities, insurance or other investment products or services nor a distribution of information for any such purpose in any jurisdiction. In particular, the information herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States of America, or to or for the benefit of United States persons (being residents of the United States of America or partnerships or corporations organised under the laws of the United States of America or any state, territory or possession thereof). All the information contained in this document is for general information and reference purpose only without taking into account of any particular investor’s objectives, financial situation or needs and may not be redistributed, reproduced or published (in whole or in part) by any means or for any purpose without the prior written consent of KGI. Such information is not intended to provide any legal, financial, tax or other professional advice and should not be relied upon in that regard.

All investments involve risks. The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities.

Bond investment is NOT equivalent to a time deposit. It is NOT protected under the Hong Kong Deposit Protection Scheme. Bondholders are exposed to a variety of risks, including but not limited to: (i) Credit risk – The issuer is responsible for payment of interest and repayment of principal of bonds. If the issuer defaults, the holder of bonds may not be able to receive interest and get back the principal. It should also be noted that credit ratings assigned by credit rating agencies do not guarantee the creditworthiness of the issuer; (ii) Liquidity risk – some bonds may not have active secondary markets and it would be difficult or impossible for investors to sell the bond before its maturity; (iii) Interest rate risk – When the interest rate rises, the price of a fixed rate bond will normally drop, and vice versa. If you want to sell your bond before it matures, you may get less than your purchase price. Do not invest in bond unless you fully understand and are willing to assume the risks associated with it. Please seek independent advice if you are unsure.

You are advised to exercise caution and undertake your own independent review, and you should seek independent professional advice before making any investment decision. You should carefully consider whether investment is suitable in light of your own risk tolerance, financial situation, investment experience, investment objectives, investment horizon and investment knowledge.

No representation or warranty is given, whether express or implied, on the accuracy, adequacy or completeness of information provided herein. In all cases, anyone proposing to rely on or use the information contained herein should independently verify and check the accuracy, completeness, reliability and suitability of the information. Simulations, past and projected performance may not necessarily be indicative of future results.

Information including the figures stated herein may not necessarily have been independently verified, and such information should not be relied upon in making investment decisions. None of KGI, its affiliates or their respective directors, officers, employees and representatives will be liable for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind) suffered or incurred by any person or entity due to any omission, error, inaccuracy, incompleteness or otherwise, or any reliance on such information. Furthermore, none of KGI, its affiliates or their respective directors, officers, employees and representatives shall be liable for the content of information provided by or quoted from third parties.

Members of the KGI group and their affiliates may provide services to any companies and affiliates of such companies mentioned herein. Members of the KGI group, their affiliates and their directors, officers, employees and representatives may from time to time have a position in any securities mentioned herein.
Hashtag: #KGI #MarketOutlook

The issuer is solely responsible for the content of this announcement.

KGI

KGI is one of the region’s leading financial institutions since 1997. Our scope of business encompasses wealth management, brokerage, fixed income, and asset management. We are committed to offering a broad range of financial products and services to corporate, institutional, and individual clients throughout Asia. Backed by KGI Financial Group, we have a robust Asia footprint covering Taiwan, Hong Kong, Singapore, Indonesia, and Thailand.

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FPG Fortune Prime Global Appointed Thai Country Manager to further strengthen FPG’s presence in the ASEAN region

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BANGKOK, THAILAND – Media OutReach Newswire – 9 December 2024 – Multi-jurisdiction regulated broker FPG Fortune Prime Global has appointed Alice, the former Fullerton Markets Country Manager, as the Country Manager for Thailand to further strengthening the company’s presence in the ASEAN region.

Country Manager, Alice

Alice brings over 8 years of experience in the financial industry, including her role as Country Manager at Fullerton Markets. With a strong focus on the ASEAN market, particularly Thailand and Laos, Alice has been a prominent voice in Thai media, raising awareness about the importance of transparency and fairness in brokerage choices.

Alice and FPG Fortune Prime Global are deeply committed to empowering clients to trade with the right mindset. FPG Fortune Prime Global focuses on educating clients and helping them achieve sustainable growth, emphasizing long-term earnings over short-term gains. Transparency and exceptional support remain at the core of FPG Fortune Prime Global’s mission, ensuring clients have the tools and knowledge they need to succeed.

Alice’s proven expertise in strategic planning, team management, and sales execution has consistently delivered impressive results, driving sales performance, building high-performing teams, and achieving organizational goals.

This appointment marks an exciting milestone for FPG Fortune Prime Global as the company continues to expand its footprint in Southeast Asia, building on its established global offices in Asia, Australia, and Europe. Alice, alongside her team, will play a key role in developing the Thai market and supporting FPG Fortune Prime Global’s commitment to providing world-class brokerage services tailored to the region.

Hashtag: #fortuneprimeglobal #FPG #fxtrading #forex #fx





The issuer is solely responsible for the content of this announcement.

About FPG Fortune Prime Global

FPG Fortune Prime Global has over 30 years’ of industry experience, our clients can rest assured that they receive the best possible service from us. FPG Fortune Prime Global is constantly evolving to ensure our retail and institutional clients to receive the best possible trading conditions which include tight spreads, fast execution and quick deposit/ withdrawal.

We fully understand that in this industry, trades are keen to find a forex broker that is as much reliable as possible to make themselves comfortable. With FPG Fortune Prime Global, we have active traders from over 30 countries around the world, who depend on us for the safety and security of their funds on a daily basis.

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CPC Corporation, Taiwan and Apollo Technology Win Top Green Companies in Asia Award at ACES Awards 2024

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BANGKOK, THAILAND – Media OutReach Newswire – 9 December 2024 – CPC Corporation, Taiwan and Apollo Technology, a subsidiary of Veolia, have been honoured with the prestigious Top Green Companies in Asia Award at the Asia Corporate Excellence and Sustainability (ACES) Awards 2024. This accolade recognises their collaborative efforts to support Taiwan’s sustainability goals through pioneering remediation and resource management projects that prioritise environmental responsibility, community welfare, and economic growth.

Honouring collaborative excellence in sustainability: Shen-Te Chen, Vice Chairman of Apollo Technology (left center), and Chung-Ying Li, Director of CPC Corporation, Taiwan (right center), proudly receive the Top Green Companies in Asia award on behalf of CPC Corporation, Taiwan, and Apollo Technology, a subsidiary of Veolia Group. This award celebrates their joint efforts to support Taiwan’s sustainability goals through pioneering remediation and resource management projects that prioritise environmental responsibility, community welfare, and economic growth. Presenting this prestigious accolade are Dr. Shanggari Balakrishnan, President of the ACES Awards (far left), and Luis Bueno Nieto, Advisor to the ACES Council (far right).

As leaders in Asia’s energy and environmental sectors, CPC and Apollo embody Taiwan’s commitment to achieving net-zero emissions by 2050. Established in 1946, CPC Corporation, Taiwan’s largest state-owned petroleum company, has been at the forefront of transitioning to renewable energy sources and sustainable practices. Apollo Technology, an innovator in water and waste management, specialises in transforming industrial by-products into valuable resources through a circular economy approach. Their partnership strengthens Taiwan’s journey toward a greener future, showcasing how collaboration can drive meaningful environmental change.

In alignment with Taiwan’s Green and Sustainable Remediation (GSR) initiative, CPC has integrated green practices in site remediation since 2008. In collaboration with Apollo, they have launched remediation projects at key sites, such as the Hsinchu and Taichung Oil Distribution Centers. Apollo’s advanced soil and groundwater remediation techniques aim to restore ecological balance and ensure the sites’ long-term sustainability, benefiting both local communities and natural habitats.

Apollo’s expertise in sustainable remediation has already delivered substantial results. At the Hsinchu Oil Distribution Centre, the company successfully treated over 43,200 tonnes of oil-contaminated soil and reduced 848 tonnes of carbon emissions through bioremediation and in-situ groundwater systems. Their work enables CPC to identify high-priority remediation sites and apply innovative solutions like phytoremediation, which uses specific plants to extract pollutants from soil and groundwater.

This award reflects CPC Corporation, Taiwan, and Apollo Technology’s unwavering commitment to environmental stewardship and sustainable industrial practices. The Top Green Companies is awarded to companies that run their business operations yielding minimal negative impact on the environment, community, and society. The ACES Awards celebrate companies that excel in driving growth and community contribution while maintaining high ethical standards. With Veolia’s support, Apollo continues to enhance its resources and expertise, underscoring a shared vision of eco-transformation in Taiwan’s industrial sector. Together, these companies are setting new standards for green innovation in Asia, creating pathways toward a resilient, sustainable future.

Hashtag: #CPCCorporationTaiwan #VeoliaGroup #ApolloTechnologyTaiwan #ACESAwards2024 #SustainabilityLeadership #EnvironmentalStewardship

The issuer is solely responsible for the content of this announcement.

About CPC Corporation, Taiwan and Apollo Technology

Founded in 1946, CPC Corporation, Taiwan, is the nation’s largest state-owned petroleum and natural gas company. With a focus on energy security and sustainability, CPC has diversified its operations to include renewable energy, environmental remediation, and green practices, supporting Taiwan’s net zero ambitions and environmental goals.

Apollo Technology, a subsidiary of Veolia, specialises in environmental solutions, including advanced water and waste management. Known for its expertise in sustainable resource management, Apollo applies cutting-edge technologies to transform industrial by-products into valuable resources, helping industries transition toward circular economy practices and reduce their environmental impact.

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Integrating AI in Trading: 4 Steps from Global broker Octa

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KUALA LUMPUR, MALAYSIA – Media OutReach Newswire – 7 December 2024 – Artificial intelligence is transforming trading, delivering unprecedented power in data analysis, pattern recognition, and decision-making. However, around 40% of traders hesitate to fully trust AI-driven decisions as they fear losing control over critical trading outcomes. Kar Yong Ang, financial markets analyst at Octa Broker, explores how traders can harness the power of AI while maintaining control and avoiding excessive intervention.

Real Advantages of AI in Trading
AI enables traders to process massive datasets quickly and efficiently. For example, machine learning algorithms analyse historical price data, market sentiment, and global news to predict market trends. Studies confirm that AI-powered algorithms improve trade accuracy by 38% compared to traditional methods.

Alongside this, AI automates time-consuming processes, such as monitoring price fluctuations and stop-loss orders, as well as executing trades based on predefined parameters. A case study on TradeWeb showed that the implementation of AI systems increased trading speed by 23% while the number of errors decreased by 15%.

What is more, AI excels in identifying market patterns that might go unnoticed by human analysis. For instance, JPMorgan’s AI systems predicted potential market movements with an accuracy rate of 75%, as highlighted in a Cointelegraph report.

The Risks of Overusing AI in Trading
Over-reliance on AI could weaken traders’ ability to manually interpret the markets. A recent study showed that traders relying solely on AI experienced a 22% reduction in the ability to perform manual analytics after six months of using AI alone. This ramps up the risks, as traders should always remain on guard and be able to conduct independent objective analysis to avoid misleading assumptions.

Although the algorithms do reduce the number of mistakes, they aren’t error-prone. Data inconsistencies, algorithmic biases, and unpredictable market events can lead to poor trading decisions and losses. For instance, a 2023 market analysis revealed that 12% of trades executed solely by AI systems resulted in unexpected losses due to flawed input data.

Tips for Balancing AI and Manual Trading
Automating decisions may save time but can result in traders losing sight of broader market contexts. Experts stress the importance of using AI as a supportive tool rather than a decision-making replacement. Here are four steps on how traders can integrate AI into their trading routine while balancing the risks and reaping the perks.

  1. Combine AI insights with manual analysis. AI has to complement traditional trading techniques. For example, combining AI-driven insights with manual analysis can provide a nicely rounded method, improving accuracy and adaptability.
  2. Start with a demo account. To avoid risking the real budget, it’s advised to test AI’s capabilities and trading decisions using a demo account, which is available on Octa Broker. The demo account allows traders to experiment with AI and recognise its functionality and barriers risk-free.
  3. Understand AI’s limitations. AI models rely on historical statistics and won’t adapt quickly to surprising market changes. Traders must regularly examine the relevance and accuracy of AI-based tools to ensure solid performance.
  4. Use AI for post-trade analysis. Post-exchange reviews using AI allow traders to get deeper insights on their trading successes and failures. Tools like Octa Vision analyse beyond trades to help you discover your trading style and propose upgrades. This iterative process allows traders to refine their strategies and avoid repeating mistakes.
The Future of AI in Trading
Although AI still poses certain risks, people actually trust it more than humans, according to the Ipsos Consumer Tracker. Businesses adopt the tool more willingly, with 50% of financial institutions having already integrated AI into their trading workflow. According to McKinsey, a trend of growing AI adoption on the enterprise level is likely to stay and evolve: AI in business is expected to grow 18% annually through 2030, with advanced predictive models and risk management becoming the standard. This may drive increased adoption rates among retail traders, too.

In 2025, the business ecosystem is expected to rely heavily on AI. Companies that develop a solid understanding of AI applications today will be better prepared to navigate these changes, ensuring they stay at the forefront of the trend. The same works for regular traders. Those who want to make AI a tool for efficient trading should acknowledge its strengths and weaknesses.

Responsible AI deployment is key. Traders who balance AI-driven insights with manual analysis and maintain a focus on continuous learning can leverage the technology. Besides this, they can optimise their trading outcomes while safeguarding against potential risks.

Hashtag: #Octa

The issuer is solely responsible for the content of this announcement.

Octa

is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

In the APAC region, Octa received the ‘Best Trading Platform Malaysia 2024’ and the ‘Most Reliable Broker Asia 2023’ awards from Brands and Business Magazine and International Global Forex Awards, respectively.

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