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Zak Westphal: Leveling the Trading Field for Retail Investors With AI



As the CEO of StocksToTrade, Zak Westphal sees a lot of potential in using AI to help level the playing field for retail investors. There’s no denying that making complex data analytics more accessible could democratize finance and introduce a new era of investing, one that is far more inclusive and accessible than the systems we have in place today.


Still, Zak also realizes it's not all sunshine and rainbows. With the power of AI also comes an increased need for responsibility and accountability. If these tools are misused or mishandled in any way, which a lot of people fear that they might, the tech meant to empower everyday people could just end up further concentrating money and knowledge in the hands of a select few.


We sat down with Zak Westphal to pick his brain on this exact issue during this interview. He made it clear that if we promote financial literacy and accountability around AI, we can steer the ship in the right direction - creating fairer markets where everyone has a fighting chance to succeed.


Zak, thanks for joining us. You founded StocksToTrade with a mission to empower retail traders. Can you elaborate on how you see AI as a critical component in fulfilling that mission?

Absolutely. Well, as someone who started out as just a regular old retail trader myself, I know firsthand how tough it is for the little guy to compete. All those major firms on Wall Street have entire teams dissecting every speck of news, data, and market movement with huge budgets we can only dream of. It's practically impossible for everyday investors to make sense of all that intel quickly enough to know the right times to buy and sell.


But that's why I'm so excited about AI. It can dig through endless amounts of data, and pick up on obscure patterns and connections that would take a human weeks or months to spot, if they even could. What we're doing is basically "democratizing" that institutional-grade analysis so retail traders can get on more even ground. We're giving them the tools to process all that market intelligence instantly so they can make those strategic calls themselves. It really does have so much potential to shift the balance of power.


There's often a perception of AI trading as these mysterious algorithms. How does your philosophy at StocksToTrade address that, ensuring both the power of AI and the protection of users?

I get why some see AI trading as this mysterious black box full of inscrutable algorithms. And with some of the shady actors out there, being wary is understandable.


Our goal with StocksToTrade is to push for more transparency - not just telling people what to buy, but showing them why the AI makes those calls.


Like with our IRIS tool. It doesn't just spit out a stock rating, but actively highlights the specific factors driving it - breaking news events, social media buzz, and historical price patterns. So traders can really learn instead of just blindly following the machine.


And in my view, AI should never mean fully handing over the keys. We built in ways for users to customize features to their personal risk tolerance. Plus safeguards like real-time price swing alerts so people can stay actively involved. The ideal partnership is human creativity combined with machine intelligence - playing to both strengths and covering individual weaknesses. The tech boosts our human pattern recognition without replacing it.


IRIS Analytics is a great example. Can you illustrate how it's helped a trader identify an opportunity that might have been missed relying solely on traditional methods?

Okay, let's take a biotech startup working on some promising new drug as an example. Typically you'd follow their stock chart, any news of clinical trial results, and things like that. But there's a whole ocean of data that could impact that stock beyond those standard metrics.


With IRIS, you can suddenly see the bigger picture - such as increased chatter about the drug among medical professionals on social media. From there, the algorithm may surface that companies similar to this one often get share price spikes after certain FDA approval milestones.


Now each of those details alone doesn't guarantee anything. But together they paint a much fuller picture of market sentiment and momentum to keep an eye on. IRIS isn't predicting certainties, but giving investors an expanded perspective so they can spot those early signals and make their informed calls. It's about broadening vision, not handing over decisions. More context to empower the human making the judgment.


Looking ahead, what excites you most about the future of AI on your platform?

I am most optimistic when thinking about where this could go in terms of hyper-personalization. Right now our AI is more broad market analysis. But what if it could study and get to know each trader's specific style and strategies over time?


I envision it saying something like "Hey John, I've noticed you tend to do well with small-cap pharma stocks when there's a spike in social media mentions. Based on that, you may want to check out these three undervalued stocks that seem right up your alley."


It would be the AI adapting to fit the individual user, helping reinforce their strengths rather than forcing them to conform. So it's not about investors having to fit some mold - it's the AI fitting itself to each trader and their kicks. Helping them play to what makes them successful. That's what could really be game-changing.


A final thought - for retail investors intrigued by AI, what's the best approach?

For people interested in trying out AI for their trading, the big thing to remember is it's a tool - an incredibly powerful one no doubt, but still just a tool.


I'd say come in with curiosity rather than blind faith. Check out some educational materials first to grasp how AI works its magic behind the curtain. Run a few small test trades to feel it out before betting the house.


The real advantage happens when you engage actively with the tech - learning to analyze all that data yourself alongside the AI. Gradually build your intuition informed by those computer insights. No algorithm is flawless, so take suggestions as insight, not guarantees. But put in the time to build your skills in tandem, and AI can massively widen your trading horizons.


It's not a magic crystal ball. But if you see it as an ever-evolving partnership, helping compound both the machine's abilities and your human creativity over time, then it can truly take your trading game to the next level. You just have to put in the work too.

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