How AI Can Improve Your Day Trading Strategies

This article was written by Isaac Rothstein – Analyst at I Know First.


  • Day trading has gotten very popular in recent years
  • Day trading has huge upside potential
  • 79.5% of day traders lose money
  • AI day trading strategies can drastically improve your consistency and returns
  • I Know First is now offering 4 new packages to increase profits for day traders

Recent Popularity of Day Trading

Within the last few years day trading has become extremely more popular partially due to commission free trades. Up until recently almost every trading platform charged a commission fee per trade, but now many platforms are taking away their commission fee in order to have more frequent traders use their platform. In 2013 Robinhood was the first commission free trading platform and since then Fidelity, eToro, and others have followed their lead. This helps day traders immensely so that commission fees don’t eat into their profits.

Day Trading Gives Huge Upside Potential

Almost everyday there are stocks that go up 5%, 10% or even more. Day trading these stocks at the correct time can give huge profits quickly. If your $10,000 portfolio were to profit 1% every trading day for a year you would have $123,967.42 (not including commission fees). This upside brings glamour to day traders although it is very difficult to consistently turn a profit while making continuous short-term trades.

Most Day Traders Lose

According to eToro, 79.5% of day traders lost money in 2018 losing an average of 36.3%, compared to the S&P 500 returns of -5.66%. Although the stock market declined in 2018, the losses of day trader were substantially greater than that of the S&P 500. Although that study was just covered over one year there are numerous other studies that show that day traders more often than not lose money compared to longterm traders.

According to a study done by two University of California professors showed that from 1991-1996, 67% of day traders had smaller returns than passive traders. However more day traders lose than not, they still have very high reward potential if they choose their stock selections very effectively.

How AI Can Improve Day Trading Returns

Although a high percentage of day traders lose money, this risk can be mitigated through AI day trading strategies. I Know First’s short term models range from 1 day to 6 day forecasts. For every time range, we have had a hit ratio higher than 50% and as high as almost 70%. For an in-depth look at the percentage of correct forecasts predicted, look here. Consistently being able to target stocks that are profitable drastically increases the probability of making money on a daily basis. We are now offering multiple short-term packages to further improve your consistency and profitability for day trading.

Day trading strategies using our AI has had tremendous recent success with our short-term forecasts. From Friday, July 3rd through Tuesday, July 7th, our average returns of the top ten stocks outperformed the S&P 500 by nearly 7%. On top of that, our best performing stock, VSLR, increased by over 45% in just a 3-day span.

New I Know First Packages for Day Traders

I Know First is now offering 4 new short term packages for day traders: “Short-term Top 10 US Stocks“, “Short-term Aggressive Stocks“, “Short-term Small Cap Stocks“, and “Short-term Indices“.

The Top 10 US Stocks package delivers clients daily top 10 S&P 500 stocks for 1 day to 6 day time horizon. This package has some more safety due to the nature of the S&P 500 being built on relatively stable and large companies.

Best S&P 500 Stock Picks

The Aggressive Stocks package gives a daily forecast for the top 10 aggressive stocks for long and short positions for 1 day to 6 days. Due to the aggressiveness of this package, there is tremendous upside potential for those who use day trading strategies.

Stock Screener

The Small Cap Stocks package has forecasts for the best small cap stocks for 1 day to 6 days. Small cap stocks give the investor the ability to acquire more shares of a company and the opportunity to maximize profits.

Best Small Cap Stocks

The final short-term package is for indices. This package consists of short-term forecasts for various US indices in addition to gold, oil, and other commodities.

About the I Know First Algorithm


The I Know First self-learning algorithm analyzes, models, and predicts the stock market. The algorithm is based on Artificial Intelligence (AI) and Machine Learning (ML) and incorporates elements of Artificial Neural Networks and Genetic Algorithms.

The system outputs the predicted trend as a number, positive or negative, along with a wave chart that predicts how the waves will overlap the trend. This helps the trader to decide which direction to trade, at what point to enter the trade, and when to exit. Since the model is 100% empirical, the results are based only on factual data, thereby avoiding any biases or emotions that may accompany human derived assumptions.

The human factor is only involved in building the mathematical framework and providing the initial set of inputs and outputs to the system. The algorithm produces a forecast with a signal and a predictability indicator. The signal is the number in the middle of the box. The predictability is the number at the bottom of the box. At the top, a specific asset is identified. This format is consistent across all predictions.

Our algorithm provides two independent indicators for each asset – Signal and Predictability.

The Signal is the predicted strength and direction of the movement of the asset. Measured from -inf to +inf.

The predictability indicates our confidence in that result. It is a Pearson correlation coefficient between past algorithmic performance and actual market movement. Measured from -1 to 1.

You can find a detailed description of our heatmap here.

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Please note-for trading decisions use the most recent forecast