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By Faith Ashmore, Benzinga
Artificial Intelligence (AI) is taking the world by storm, from healthcare to Big Tech and everything in between. According to data obtained by Finbold, the AI industry's estimated market size was $207.9 billion in 2023 and is expected to increase dramatically by 788.64% to reach $1.87 trillion by 2030.
While AI is being integrated into society with great vigor today, unbeknownst to many, AI is not a new concept. With the recent attention on AI, many traders are looking for platforms that include AI but one company has been using it all along. Lane Mendelsohn, president of VantagePoint, is here to explain how the company was one of the first to embrace AI in the 20th century and its journey along the way.
Benzinga: It seems like AI is just now becoming popular and mainstream, but it's not new. Who first came up with AI and when was that?
Lane Mendelsohn: Artificial intelligence was invented and created back in the 1950s at Carnegie Mellon. That's where my father went to college and in the 1960s [Lou Mendelsohn] had the opportunity to work with AI on the mainframes. He saw that it had capabilities, but at that time, he didn't have a real application for it. Fast forward to the 1980s, he had developed the first commercial trading software in the world that did historical backtesting and simulations, and he was in who's who in the financial world for that invention. Then in the late 1980s, my father began implementing AI to financial market forecasting and introduced to the world in 1991 the first-ever AI forecasting trading software for individual traders, and that was the introduction of VantagePoint.
Benzinga: VantagePoint has been using and offering AI since 1991. How has it been able to stay at the forefront of this technology for so long?
Lane Mendelsohn: Its a matter of continuing to develop and refine the technology consistently. Weve been forecasting the markets with AI for over 3 decades, so thats a lot of historical data thats all in the AIs learning. We all know the markets are constantly changing and, honestly, AI and technology are constantly changing. For us to ensure that we're continuing to provide that cutting-edge technology, we have to stay vigilant. We must persist in further developing the technology and refining it. That's a commitment that we've made and continue to make.
We forecast for over 2,300 stocks, ETFs, Futures, Forex Pairs, commodities, and cryptocurrencies every single day. Each one uses anywhere up to 90 input values to calculate daily predictive indicators. Each input uses up to seven values to be calculated. That makes up to 630 data points per market or 1,450,000 for all supported markets daily. But then you add in our forecasts for Options traders, and youre looking at over 1 billion data points per day. Thats something no human could handle in a day, let alone years, and VantagePoint can handle it through the research, development, innovation, and training weve devoted to it over the years.
Over the last ten years, we've invested over $10 million into research and development. And were never done. We continue to work on training and accuracy every day. That commitment to constant innovation gives VantagePoint traders a tremendous advantage in the markets. And our goal is to continue to provide that edge every trading day.
Benzinga: What differentiates VantagePoint from the recent surge of AI for traders that have emerged in this market?
Lane Mendelsohn: [VantagePoint has] three key elements proven accuracy, longevity, and patents. No one else in this space has third-party verified accuracy up to 87.4%. No one has been around for 45 years as a company while providing AI for traders since 1991 like VantagePoint has. And lastly, no one has two proprietary U.S. patents on performing intermarket analysis using neural networks and calculating predictive technical indicators.
[VantagePoints] neural network has three different parts to it. There's the input layer, hidden layer, and output layer. The input layer is ingesting all of the raw data it's fed; millions and millions of data points go in the hidden layer. The neural networks are made of individual nodes, these individual neurons that are built to simulate a human brain, but obviously much more powerful and can do a lot more. Each one of those neurons has its own specific role, its own specific function, in the neural network. Each one on its own is not capable of coming up with the answer, but what happens is they all have a very specific job that they're trained on, and they're trained to do one specific thing very well. And then the findings from each of those individual neurons and nodes are pushed to the output layer where they're reassembled together to give you the answer. In the case of market forecasting, the answer is, Heres what the price of Nvidia (NASDAQ: NVDA), Tesla (NASDAQ: TSLA) or Meta (NASDAQ: META) is going to do tomorrow.
Benzinga: You mentioned two patents. Can you elaborate on those two U.S. patents VantagePoint holds in the AI domain and how they contribute to the software's forecasting reliability and proven accuracy?
Lane Mendelsohn: Certainly. To start, each patent on their own stands on its own two legs. Its when you have both combined that the unparalleled edge is found. One of those patents is for intermarket analysis and analyzing global market data. So, it's identifying for Nvidia stock, for example It's going to look at the 30 most closely related markets that drive impact and influence the price of Nvidia. Now, if you want to know where Nvidia's going to go or any stock for that matter, you should look at what factors are driving and pushing that particular market. VantagePoint identifies what those individual markets are, and then through this proprietary process, we're weighing those, because it's not like every one of those 30 markets drives, impacts and influences Nvidia to the same degree. They're all weighted, and those weightings adjust over time.
So, the patent identifies the markets, weighs them, and then uses that information for pattern recognition, forecasting what's going to happen next. The second patent takes traditional lagging indicators, for example Bollinger Bands, MACD, Stochastics, and so on, which only give you past data, and turns them into leading indicators. And that's the second patent, Calculating Predictive Technical Indicators. So, when you combine those two proprietary advancements together, that's what really stacks the odds in the favor of independent traders and they're now able to do something that on their own would've been humanly impossible.
Benzinga: What advice do you have for traders who are considering adopting AI for their trading strategies?
Lane Mendelsohn: You've got to do your due diligence. You've got to make sure the AI is doing something that makes sense for a trader, that it serves a purpose, that its doing something you couldn't have done on your own, and that it's consistently highly accurate. It needs to be proprietary AI that has gone through deep learning, specifically for predicting the markets and considering global market analysis. You dont want some open-source code licensed from a new AI company with a pretty bow slapped on it. So far, VantagePoint is the only AI for traders Im aware of that checks those must-have boxes.
For traders and investors looking to get an edge in the markets, VantagePoint could be a solution with its long history, dual-patented technology, and a commitment to continuing innovation. Visit them at www.vantagepointsoftware.com
Featured photo by Igor Omilaev on Unsplash
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
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