How to Become an AI Quant: The Master of Investing in Crypto

Last modified: June 12th, 2023

By Justin Rogers

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Artificial intelligence is a powerful thinking machine that is getting closer to being able to make human-like decisions. This is important for investors because to stay ahead of the game and keep updated with the newest technology. Quantitative programmers or quants and those who write mathematical or scientific program algorithms in the financial world for maximum profits. These quants use set rules to initiate buying and selling in the crypto markets. With the development of AI, we are seeing a whole new level of financial programmers called AI quants.

Here are the steps it takes to become an AI quant:

  1. General Programming
  2. [Crypto Investing](#CryptoInvesting
  3. Artificial Intelligence
  4. Perfect Your System
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General Programming

The most basic skill of becoming a regular quant is programming. If you are not able to program then you are not able to automate your investing system. There are many options for programming languages to pick from, however, the most popular in the world is Python. Python can be used for investing in many ways including data analysis, data collection, automation, and eventually AI. All of these abilities fall under the skill set of data science. Python is a great option for data science and we will see that from looking into how to become an AI quant.

The first part of data science that you should get used to is data manipulation. This is when we receive data and have to transform it into something we can work with. Messy data can cause great problems and is something we have to avoid at all costs, especially when working with money and assets while doing quantitative crypto trading and investing. Crypto data can come in with missing values or you may want to modify the data to your liking. After we can do what we want with our data, then we need to be able to analyze our data.

Data science helps us look at data differently by introducing scientific methods into how we look at numbers. This new understanding can assist in finding things about our data that would not have been found otherwise. After analyzing our data the last basic thing that needs to be done is automation. Automation helps us complete tasks at the click of a button and can even run on a schedule. I can calculate my investing system every single day at the same time if I wanted to, all because of automation.

Python is very easy to get into, but it has some quite complicated topics. Not everything in programming will be easy and just handed to you. Something you can do to make life easier for you when coding is using Python crypto libraries. These libraries will guide you into more efficient programming, and finishing problems faster by having to write less code. Libraries are essential tools for investors and are considered basic AI quant skills.

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Crypto Investing

Building your investing system will come in many phases and it is important to start small. It will never be perfect and never be absolute. Certain parts will stop working and others will shine more than you have originally expected. Being able to adapt to your system is crucial. Using AI in crypto cannot be done by shoving complicated code into a pre-built system. We must build this system knowing that eventually, we will be using AI so that when it comes time, things will fit together smoothly.

Following trends is the best way to set up our system to be able to add artificial intelligence later on. We will acquire data from the markets in the form of indicators like the Relative Strength Index, MACD, and Moving Averages, as well as price data. Data Mining, also known as the extraction of useful data, can be used here to produce a more unique model that is not like competitors who may be using the same indicators. Once we have our mined data from the markets we can begin to build our investing system to find out what works before for us and what does not.

Backtesting, the use of historical data to test an investing system, will help you determine what indicators you like and what values you would like to keep constant with your indicators. Keeping constant values is important to ensure that you will get the same results every time you use the specific indicator and will come in handy when we move on to using AI. If we didn’t backtest, we could have ended up until we were ready for algorithmic trading to realize our system from the beginning was not good enough to work well in the markets.

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Artificial Intelligence

Now that we have our investing system, we need to figure out what problem our AI will be able to fix. There is a lot of opportunity for this financial AI and each system may require different additions before we are ready for ​​AI-powered crypto trading or investing. AI will help us determine the best possible outcome of each investment decision in our Quantitative Program. As we slowly begin to bring everything together with AI, you will notice that each of the components of our foundation is just as important as each other. AI is a developing technology and needs all the aid it can get to produce important results for crypto investing so there are no cutting corners here.

To incorporate AI you will not be able to just chuck all the data into a function and expect a good output. There will be trial and error just like our original investing system and you have to try different data with different algorithms. It might be best to start small and use AI for finding efficient assets you would like to invest in and allowing this program to handle your risk management. We can also use it for balancing assets that we have already chosen to automatically perform portfolio management. To do either, data mining would need to be in order.

Now that you have basic AI included in your investing system you can start to mix the programs. Making the Efficiency AI work with the Asset Balancing AI and combining programs to come to a more unified thinking and process of coming to a final result. This will increase accuracy because it limits human error and can be as precise as it needs to be to find the solution that the AI is happy with.

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Perfect Your System

AI is powerful and no matter how much AI you are putting into your investing system you have to be constantly monitoring it. Just like your original investing system, things can stop working and aspects may need to be replaced with all new code or modified. Perfecting your investing system will take work but the results will be very profitable if you can create a successful AI-powered Quantitative Program.

Ways that you can maintain your investing system could be going back to your fundamentals and picking up some new skills in statistics. Bootstrapping, creating many sample datasets from a single dataset, can increase accuracy and hone down on results that may need a little extra data. Mathematical programming has a lot to offer to your AI model and can help ease certain hiccups that your AI is struggling to get past. Data Science has a ton of libraries that can be used to help you and you may find a hidden gem somewhere if you look hard enough for it.

There are unlimited ways that you can improve your AI model. Remember that AI is still a developing technology that can make mistakes. No system should be fully trusted with your life savings without knowing the risk that your program holds. Sufficient backtesting should be used, as well as giving your system time and testing with real-time investment decisions using a low amount of money to ensure that your model is working properly.

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Final Comments

What is an AI quant?

An AI quant, also known as a quantitative programmer, builds systems that can be put in place to make money in financial markets. These systems can be for trading or investing, but the main point is the profit they make. Adding AI to the systems can improve efficiency and accuracy if done correctly.

What are the basics of becoming an AI quant?

The basics that you have to get down revolve a lot around data science. You must have a good foundation of data skills and the ability to create an automated program to organize, analyze, and act upon findings within data.

Do you need AI to be a quant?

No, you do not need AI to become a quant. Many quants can develop their programs and economic indicators that perform better than any current AI would be able to assist them. This allows the quants to build their automation programs that solve problems and execute crypto or other financial market decisions, without the need for AI to be involved.



The information provided in this article is not investment advice. We are not responsible for any losses incurred by readers who choose to invest in cryptocurrency. Readers should do their own research before investing in cryptocurrency. Cryptocurrency is a volatile asset and there is a high risk of loss. Readers should only invest money that they can afford to lose.

Desire to be a better Investor?

Are you ready to start implementing scientifically proven methods into your crypto investing?

Desire to be a better Investor?

Are you ready to start implementing scientifically proven methods into your crypto investing?

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