Algorithmic and Artificial Intelligence Trading in Volatile Markets

Algorithmic and Artificial Intelligence Trading in Volatile Markets

Volatility: The Great Challenge for Investors

Financial markets can change drastically in the face of unexpected events, generating spikes in volatility (sharp price fluctuations). During these periods, uncertainty reigns, and human decisions are often marked by panic or euphoria. Below, we review four recent episodes that shook global stock markets, causing historic swings:

Donald Trump’s Trade War (2018-2019)

In 2018, the Trump administration imposed tariffs on China, triggering a trade war. Each new tariff or incendiary tweet translated into stock market tremors. In fact, “during the 2018-2019 trade war, every tariff announcement caused sharp drops in the stock market. In 2018, the S&P 500 fell 6.6% in December due to escalating tensions with China.” In other words, the mere expectation of new tariffs increased volatility and temporarily sank stock valuations in the United States and worldwide. Analysis confirms that 2018 was a year of marked stock market volatility due to the trade conflict, affecting virtually all sectors.

Brexit Referendum (2016)

The surprise vote in favor of the United Kingdom leaving the EU (Brexit) in June 2016 triggered historic volatility in European markets. The British pound plummeted more than 8% in a single day, to lows not seen since 1985. Stock markets were not immune to the shock: in the first minutes after the result, Spain’s IBEX 35 plunged 15.9%, the largest intraday drop in its history, before moderating losses to -9%.

The initial selling panic led to emergency interventions—the Bank of England announced £250 billion to support the financial system—showing just how abrupt the impact was. This episode demonstrated how markets can overreact to political events, with dizzying movements in a matter of hours.

COVID-19 Pandemic (2020)

In March 2020, the coronavirus caused an unprecedented global shock. Restrictions and fears of economic impact sank stock markets within weeks. It was the fastest drop into a bear market in recent history. Panic over the spread of COVID-19 caused the IBEX 35 to fall 11.76% in five days, wiping out €74 billion, while Wall Street plunged 12.3% in the same week—its worst record since 2008.

European indices lost around 12% weekly, and volatility (measured by the VIX index) reached record levels not seen since the financial crisis. Analysts warned that “the coronavirus crisis threatens more days of volatility,” and so it was: during March 2020, the VIX index (known as Wall Street’s “fear gauge”) peaked above 80 points, reflecting a market steeped in uncertainty. In short, the pandemic showed the extreme fragility and nervousness of markets in the face of a global health crisis.

Donald Trump’s New Trade War (2025)

In his second term, President Donald Trump has reactivated an aggressive trade policy. In April 2025, he imposed a universal 10% tariff on all imports, with additional tariffs for countries with high trade deficits with the U.S. The World Trade Organization (WTO) forecasts a 0.2% contraction in merchandise trade in 2025 and warns that an escalation in so-called “reciprocal tariffs” could reduce global economic activity by up to 1.5% or even 7% if a rift occurs between the U.S. and China. This situation raises fears of a potential recession and a rollback of the multilateral economic order established since 1944.

What’s the common denominator? In all these events, volatility skyrocketed. Traditional investors faced enormous difficulties reacting in time and managing risk. In this turbulent context, a question arises: could algorithmic trading have offered any advantage during these chaotic periods?

What is Algorithmic Trading and Why Does It Shine in Volatility?

Algorithmic trading involves using computer programs that follow a defined set of instructions (algorithms) to execute trades automatically. These instructions can be based on predefined criteria such as price, time, volume, or other mathematical indicators, allowing transactions to be carried out at a speed and frequency impossible for a human. In practice, a well-designed algorithm detects signals, makes buy/sell decisions, and sends orders in fractions of a second, eliminating delays and, very importantly, human emotion from the process.

Key Advantages of Algorithmic Trading:

• Execution at the Best Price: Trades are often executed at the most favorable price available thanks to the algorithm’s reaction speed.
• Speed and Precision: Order placement is instant and exact, achieving executions at the right moment to avoid slippage due to sharp movements. In markets that move within seconds after news breaks, this speed makes all the difference.
• Reduced Costs: By automating trades, transaction costs are minimized (fewer commissions due to errors or execution delays).
• 24/7 Monitoring of Multiple Markets: An algorithm can simultaneously track various assets and market conditions, taking advantage of opportunities in different exchanges or currency pairs at the same time. A human trader could not monitor so many variables at once with the same effectiveness.
• No Emotional Bias or Human Error: Decisions are based on data and preset rules, eliminating the panic or euphoria that can cloud human judgment. Likewise, the risk of typing errors or omissions when sending orders is drastically reduced.
• Backtesting and Constant Optimization: Algorithmic strategies can be tested with historical data and adjusted before risking real capital. This allows models to be fine-tuned for different scenarios, including high-volatility cases, ensuring the algorithm reacts as expected to extreme events.

All these features make algorithmic trading especially valuable during periods of extreme volatility.

When markets swing rapidly, an automated system can execute dozens of orders in the time it takes a human to blink, and it does so following a planned logic instead of emotional impulses. For example, during the chaos of March 2020 caused by COVID-19, many financial institutions drastically increased their use of algorithms to manage their operations.

Banking executives reported that the combination of high volatility, wider spreads, and lower liquidity levels led their clients to use more algorithms to increase execution efficiency. In some cases, the volume of algorithmic trading by their clients multiplied fivefold during the crisis, with such positive results that they decided to maintain that level of usage going forward.

This shows that, in turbulent markets, those with automated tools were better able to adapt and seize opportunities (for example, capturing price differentials) compared to those who relied solely on human reaction. Additionally, industry data showed that at the peak of volatility in March 2020, the volume of electronic/algorithmic trading doubled compared to previous months, demonstrating a greater appetite for automated execution in stressful environments.

In summary, algorithmic trading provides speed, discipline, and massive information processing capacity—three crucial attributes for navigating choppy waters. It does not guarantee profits on every trade—no system does—but it does offer an operational advantage: executing the planned strategy without hesitation, at the right moment, and with more rigorous risk control.

Algorithmic Trading with Artificial Intelligence: The Next Level

AI applied to algorithmic trading not only follows pre-programmed rules but also learns and adapts over time. Through techniques such as machine learning, algorithms can identify market behavior patterns, autonomously adjust strategies, and anticipate complex movements based on large volumes of data.

Why Does This Represent a Paradigm Shift?

• AI can adapt in real-time to unexpected events such as a geopolitical crisis or a statement from President Trump.
• It allows for the personalization of strategies according to the investor’s profile and risk tolerance.
• Its analytical capacity encompasses news, social media, economic and technical indicators, generating a comprehensive view of the market.

In short, the combination of algorithmic trading and artificial intelligence allows not only to automate operations but also to continuously optimize them in the face of changing contexts. And this is where OrionONE, the innovative project of Whale Analytics, comes into play.

OrionONE: Whale Analytics’ Project for Smart Investing

If algorithmic trading is the way to go in the age of volatility, how can individual investors benefit from it? That’s where OrionONE comes in, the new project from Whale Analytics aimed at bringing high-tech automated investing to the public. According to its official website, OrionONE is “a dashboard designed to empower your investments,” presented as “the future of smart investing”. Its central goal is to revolutionize the way people invest by combining advanced algorithms and artificial intelligence (AI) to achieve superior returns ethically and responsibly.

What Does OrionONE Offer?

• Advanced Dashboard with AI: Real-time market analysis, personalized indicators, and intelligent recommendations.
• Automated Strategies That Adapt: The system learns from the market and constantly improves its decision-making.
• Accessible Interface for Everyone: You don’t need to be a programmer or professional trader to use it.
• Performance Optimization: According to Whale Analytics, OrionONE can significantly improve user results through the use of evolved strategies and automated risk control.
• Autonomy and Control: The investor defines the parameters, while the system executes with precision and without emotions.

In short, OrionONE seeks to democratize high-quality algorithmic trading, putting it in the hands of individual investors and not just large funds. Through this project, Whale Analytics pursues its mission to “train the next generation of investors” by relying on AI and cutting-edge technology. The proposal is attractive: to equip the average investor with an intelligent “co-pilot” that guides them in the most turbulent markets.

Advantages for Investors and Launch Date

For investors, the advantages of OrionONE would translate into greater security and potential profitability. Having an AI that analyzes thousands of data points per second and executes proven strategies means being able to react to events like those described (Trump, Brexit, COVID-19) as quickly as professionals, but without needing advanced programming knowledge or costly infrastructure.

Instead of being exposed to the storm, OrionONE users would have a technological umbrella: the system could, for example, reduce exposure as soon as it detects negative signals or take advantage of rapid rises by buying/selling at the right moment, all automatically. In addition, the ability to evolve with each operation means that the longer the platform is used, the more “intelligent” it becomes in adjusting strategies in favor of the investor.

Another important point is transparency and control: although OrionONE automates processes, investors maintain control of their funds and can define risk parameters, assets to trade, and general strategies. In other words, the tool executes, but you decide the guidelines (conservative, aggressive, type of assets, etc.), combining the discipline of the machine with human supervision.

Technology to Turn Uncertainty into Opportunity

Recent history demonstrates that volatility is not the exception but the norm. Trade wars, political conflicts, or pandemics can generate chaos but also open up opportunities. Algorithmic trading, especially when combined with artificial intelligence, offers a tactical advantage for navigating those turbulent seas.

OrionONE represents a clear evolution in that path, offering a powerful, accessible, and adaptive tool. Instead of fearing volatility, this platform allows you to turn it into an ally, anticipating movements and executing with millimetric precision.

For investors looking to be prepared for the new economic order, the key is to combine human intelligence with artificial intelligence. And with the launch of OrionONE just around the corner, the future of automated investment is already here.

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Ignacio N. Ayago CEO Whale Analytics & Mentes Brillantes

Permíteme presentarme: soy Ignacio N. Ayago, un emprendedor consolidado 🚀, papá con poderes 🦄, un apasionado de la tecnología y la inteligencia artificial 🤖 y el fundador de esta plataforma 💡. Estoy aquí para ser tu guía en este emocionante viaje hacia el crecimiento personal 🌱 y el éxito financiero 💰.

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