In the AI Startup of the Week, the editorial staff of ai.nl is featuring promising AI startups, their innovations, solutions and challenges. In this twenty-sixth episode, we are taking a look at Boosting Alpha, a startup based in Venlo, Limburg offering a trading technology platform powered by artificial intelligence. The startup is showing that AI technologies can even help traders with its inference driven methodology.
What can AI do for me? This question has haunted the rise of products and services powered by artificial intelligence. While AI is now part and parcel of our digital lives, it can be designed to deliver services that extend beyond some of the common use cases. One such use case being demonstrated by Boosting Alpha is trading.
The Dutch startup has built a trading technology platform that caters to individual investors, a professional trader, a wealth manager, a fund manager looking to enrich their investment portfolio. Investing in markets comes with its own uncertainty but AI could understand and mitigate those risks. Boosting Alpha is trying to prove the possibility and here’s how it aims to do that.
Financial returns powered by AI
Boosting Alpha‘s existence hinges on the need to deliver financial services powered by AI. We have seen how traditional finance has failed to be inclusive and able to support people from all walks of life. Thus, there is a rise of technologies like blockchain delivering new forms of financial inclusion. However, financial returns are a field that has stayed away from being taken over by the latest scientific approach.
Boosting Alpha wants to change with the use of AI-powered technologies to improve financial returns. It has built a platform that is not restricted to individual investors looking for a strategy to follow and boost their financial returns. However, the platform is also designed with seasoned investors, professional traders, fund managers, and wealth managers in mind.
The startup develops high performing trading strategies for various assets based on artificial intelligence technology. Boosting Alpha says its cutting edge data machine constantly gathers financial and alternative data “which transforms to a unique insight to feed into trading strategies.”
A powerful mechanism with AI
The underlying technology powering Boosting Alpha’s trading platform is an AI mechanism that combines economical, social, and scientific analytics. It leverages AI but does not limit itself to just artificial intelligence. “It is also supported by traditional quant trading methods which suit our needs,” the company notes on its website.
With its scope not limited to financial data, Boosting Alpha has built a machine learning model that greatly expands the data analytic capabilities to multiple dimensions and various types. With these technologies, techniques, and mechanisms in place, Boosting Alpha offers automation, testing, and opportunities.
- Automation: Using AI and machine learning, Boosting Alpha automatically recognises alpha factors and hard to identify correlations for a specific type of assets.
- Testing: For testing, Boosting Alpha relies on one of the dominant AI technologies called reinforced learning with the goal of continuously maximising the accumulated returns. The startup says these algorithms can be back tested based on a long history of up to 15 years in a short time period. “It allows us to generate abundant statistics to evaluate our trading strategies. It is also flexible enough to simulate a particularly challenging period i.e. 2008 financial crisis,” the startup explains.
- Opportunities: The automation and testing leads to an enlarged investment opportunity generated by ideas previously not identified by traders or wealth managers.
This form of trading is even sometimes referred to as copy trading. It eliminates the entry barrier seen with manual trading by not requiring any trading skills. There is also minimal time investment required and the platform eliminates emotional bias. Customers can trade 24/7 and even on holidays while trades get executed almost instantaneously.
Boosting Alpha trading bot: what you need to know
For automation, Boosting Alpha creates a trading bot over four phases before being made available to customers. The first phase of development sees creation of a trading hypothesis based on market knowledge of financial trading and crypto market. The second phase involves building the computer program required to collect data such as type of coins, trading volume, trading price, on daily, hours, or minute level.
In the third phase, Boosting Alpha converts this trading concept into a program and backtests the same to the most extended historical data available. “We simulate the exact trading behaviour and take slippages and execution into account,” the startup says. Then the bot is tested in the live environment with Boosting Alpha’s own investment capital to understand the result.
A subscription model
Like every other platform out there, Boosting Alpha also offers a subscription model. The bronze plan costs €10 per month but a six-month bundle brings that price down to €8 per month. This plan offers support for copy-trading with a maximum of €2,000 in capital. This plan is restricted to one active bot and option to reinvest profits or swapping of bots.
The second plan is called silver and it costs €49 a month or €31 a month with a six month subscription. Customers get copy-trading, maximum limit of €10,000 capital, maximum of five active bots, reinvestment of profits, and swapping of bots.
Then there is also a gold plan priced at €99 a month or €63 a month with a six-month bundle. This plan offers features like copy-trading, maximum of €30,000 capital, unlimited active bots, reinvestment of profits, swapping of bots, longs and shorts, unlimited connections, two weeks early access to new bots, priority customer service, and even exclusive bots under the plan.
With all these plans and a variety of options, Boosting Alpha is trying to make trading driven by technology. The way it fuses conventional trading techniques with AI and ML makes it a unique startup in our world where everything is driven by algorithms.