Are the trainings over? There are many courses available on the internet, free or paid, which can allow a neophyte to learn trading. You will have to be able to sort through the different proposals, and find the offer that suits you. In addition, it will be necessary to find quality training, at a measured price. With the arrival of ChatGPT, is it possible to train for free at cryptocurrency trading ?
In this article we will try to answer this question. I’artificial intelligence is experiencing meteoric hype in 2023, but can it be useful in a field as specific and difficult as trading? As regular readers of the Journal du Coin, we will assume that cryptocurrency basics are known, and we will be particularly interested in the technical part. The information shared in this article comes from ChatGPT version 3.5. Let’s get straight to the heart of the matter.
Getting to Know Trading Tools with ChatGPT
To learn to trade, you need understand the tools that the trader has at his disposal. THE moving averages are widely used by professionals. We can for example ask ChatGPT to make a summary on moving averages and how to use them. Here is the AI’s response:
The answer starts with a definition completely correct, simple to understand and concise. Next, the AI discusses the types of moving averages: simple and exponential. It explains the difference between the two moving averages. THE exponential moving averages allowing more weight to be given to recent prices. By reading our article on moving averagesit can be noted that there are also the weighted moving averages. However, the AI spells out the most used moving averages.
The AI also talks about theuse of moving averages. Overall, they can helpidentify trendsserve as support and resistancebut they also give information during crossings. Although one cannot have access to examples with graphs, the summary is rather complete.
For many, this can be limiting, as the visual makes it easier to understand and retain. In the end, the summary of ChatGPT makes it possible to understand what a moving average is, and its usefulness. The answer is quite comprehensive, and it also gives some links to sites (English and French) to go further. ChatGPT is able to us learn the basics of an indicatorbut is it capable of us learn to trade ?
>> Want to add 1 bitcoin to your wallet? Register quickly on Binance and try your luck (trade link) <<
Learn to trade with ChatGPT
The objective of this part is to know if ChatGPT can give us the necessary elements to develop a trading strategy. Let’s take a look at the strategy put in place by the AI, as well as its advice :
The first step is to choose moving averages. For this, the AI makes a completely classic choice by taking the 50 and 200 period simple moving averages (MA 50 and MA 200). These are the periods featured in the Wall Street Cubs Moving Averages article. Then ChatGPT explains that we get two signals based on crossovers between moving averages :
- MA 50 crosses above MA 200: the identified trend is bullish, it is a buy signal.
- MA 50 goes below MA 200: the identified trend is bearish, it is a sell signal.
Then, a first advice is delivered. You have to pay attention to the false signals. Indeed, there are many crossovers between the 50 and 200 moving averages, and some may be uninteresting. AI advises filter these signals using technical indicators. Without going into details, she explains that you can use the ROI (momentum indicator) or the levels of support and resistance. These tips are relevant, because it is interesting to combine technical indicators. Finally, the AI provides information about the risk management using stop-losses and take-profits.
In short, ChatGPT gives us a combination widely used by traders, and tips for confirming signals. However, if the AI gives the information to use take profit and stop-loss, it does not explain how to place them. She don’t talk about the part either risk management with the concept of risk rewardof risk per trade and D’leverage.
If we dig a little deeper and ask it how to place stop-losses and take-profits, the AI gives basic information, but interesting for a beginner. They can be placed at support or resistanceplace them according to the volatility, etc. However, it does not mention anything about the dynamic stop-losses For example.
In terms of risk management, AI offers risk 1 to 2% of your portfolio which is recommended by most seasoned traders to limit losses in case of adverse movements in the market.
The weak points of ChatGPT in the face of trading
Even if the AI can send us links, it is impossible to provide answers other than textual. This can pose problems for beginners who are now looking for content with graphics or in video format.
Also, ChatGPT learns to respond through its learning, but it doesn’t have no trading experience. Trading is not just the result of a strategy, unless it is implemented via a trading bot. Thus, it is difficult to make a beginner understand the importance of backtestingand especially the psychology to adopt. In fact, it is complicated to ask the AI questions about a period when the trader has a series of losing trades. Some go for example reduce the size of their positionsothers will pass several days without trading.
The objective of this article was to find out whether ChatGPT can learn to trade, or not. First of all, ChatGPT is able to give us information about technical indicators. He clearly told us what a moving average was and what it was used for. Although the summary omitted some details, it remains relatively complete. ChatGPT does not seem to be able to replace years of trading experience. But, that’s not really a surprise.
Moreover, if you want to go further, you often have to know the basics. Artificial intelligence will not have the reflex to mention all the details to take into account to learn trading. This is particularly the case for the risk management part where it absolutely does not mention the notions of risk reward or dynamic stop loss. In the end, we can say that the trading training through a professional has added value, even with the arrival of AI.
Want a boost in learning to trade? Register now on Binance and click on the button to try to win 1 bitcoin (commercial link)