Retail Trading's AI Edge
The AI Revolution
If you haven’t heard of Chat GPT where have you been? Chat GPT is like the internet or the smartphone all over again. It’s cutting-edge artificial intelligence tech accessible to the man on the street.
Remember all the futuristic cool AI tech we were promised years ago?
Well, it starts here…
(I’ll link below to useful resources to get you up to speed on ChatGPT in general but let’s focus on the trading uses.)
Everyone (including hedge funds and investment banks) is learning about this at the same time we are. The playing field is reasonably level.
I liken it to when Algo trading was just getting started.
The savvy retail trader could snipe price against a primitive algo on the order book, and then later the big players got involved and HFT was born.
This could be a huge edge for you. (Or it could just be interesting, we can’t see the future).
Remember last week I wrote about luck, well this could be a level 3 luck moment. Skill, looking in the right place and experience. No one knows, but I’m making sure I’m trying to stay ahead of the curve. You just never know… and it’s kinda fun!
Right, let’s start with what Chat GPT can do:
You can ask Chat GPT to come up with a trading strategy idea. Be specific, the output is only as good as the input:
For example, I asked it to “describe a good trading strategy a forex daytrader might use that takes 2 hours per day”
It came up with the Asian Range Breakout Strategy (I’ve chopped the screenshot for space, but it was quite detailed)
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I then switched it up a bit and asked Chat GPT “Give me a mean reversion scalping strategy for the Nasdaq” (Maybe I should be saying please more… perhaps polite humans will be spared once AI takes over!)
Here’s the output, again chopped for space:
Not bad, a decent enough starting point for strategy generation if you are looking for ideas.
Looking for unique ways to use a specific indicator? Chat GPT can answer indicator-specific questions:
I asked it ”What are some less obvious ways to use the RSI indicator”
It went on to describe how to use, divergence, trendlines on the RSI, Support and Resistance on the RSI, swing rejection and a moving average crossover on the RSI.
Again, quite smart.
Finally, I asked it for help in risk management
“What are 5 ways a day trader could set a stop loss? Make them short.” (ha, yes I did ask it to make them short.)
Anyway, that’s enough examples for now.
Today, think about ways you could explore this tool to help your trading.
There’s so much to cover and things are changing FAST.
So I’ve started a thread in the member’s area to help us stay cutting-edge and ahead of the curve with this wild new AI innovation.
If you aren’t a member, don’t worry, I’ll also summarise what I can in future emails here too, to help you stay informed.
The AI revolution is here!