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ChatGPT Crypto Trading Bots Explain? Easy How To Guide

Most people use generative AI to answer random questions, write essays, or do homework. However, some people have found more creative ways to use this novel innovation, and it’s in the form of ChatGPT trading bots.

What are ChatGPT Crypto Trading Bots - Header Picture
What are ChatGPT Crypto Trading Bots – Header Picture

Despite how trending this topic is, only a few people know how to use ChatGPT for crypto trading. So, in this article, we’ll explain what ChatGPT crypto trading bots are, how to use them, and even how to create one for yourself. 


What are trading bots?

To understand ChatGPT trading bots, you must first know the concept of trading bots. Trading bots are automated virtual robots that execute buy and sell orders on your behalf. They are computer programs that buy and sell assets at specific times and prices to fetch a profit.

Trading bots are used both in the typical financial markets and the crypto world. In centralized finance, these automated tools trade forex, stocks, and other assets. They can be connected to your trading portfolio or broker account and execute trades without your supervision.

It’s a similar process in crypto. By connecting a trading bot to your exchange, you can sit back and relax while your trading bot trades for you. 

This process is possible because of preprogrammed algorithms and, sometimes, machine learning technology, especially in the case of AI trading bots. Let’s take a deeper dive.


How do trading bots work?

Trading bots work by using preprogrammed algorithms to analyze vast amounts of market data, including price charts, trading volumes, and other relevant indicators. This helps them identify patterns that hint at profitable trading opportunities in the market— basically when to buy and sell assets.

They can use trading strategies they deem fit or the ones you set for it. Some bots recommend stop loss and take profit levels, but you often have to set them yourself, especially when you’re not using AI trading bots.

In addition, the bot’s algorithm, including the strategy you input, guides its decision-making process. 

You must connect the trading bot to your exchange or broker for them to trade. In crypto, this is done using application programming interfaces APIs, which act as bridges, linking the trading bot to your exchange. 

When your trading bot is linked, you must size your position, confirm the stop-loss, and take profit levels alongside other important trading parameters. Then, you can deploy the bot.

Once the trade is completed and you profit, you can withdraw your funds and begin the trading process. However, profits aren’t always guaranteed with trading bots. What they do is execute strategies without your supervision, removing emotional and physical limitations from trading. 

So, how well they perform is dependent on the strategy they use and, of course, market conditions. Regardless, trading bots do work. Some examples of profitable trading bots include Crypticorn’s AI trading bots, Kryll trading bots, Tickeron, and TrendSpider.


Can ChatGPT be used for trading?

Yes, ChatGPT can be used for trading. However, you cannot connect the chatbot to your trading portfolio or exchange to execute trades automatically. So, technically, a “ChatGPT trading bot” doesn’t exist.

This doesn’t mean it can’t generate codes for trading bots that work. It can also provide trading recommendations as well.

How to use ChatGPT for trading

It’s best to understand upfront that the basic version of ChatGPT, which utilizes the GPT-3.5 model, cannot access live data as it’s not connected to the internet. So, any trading recommendations it gives will be based on outdated information. 

While some recommend using APIs that let it connect to the internet, it often doesn’t work, and your data may be compromised. So, it’s best to use the plus version of ChatGPT that uses the GPT-4 model, which has internet connectivity.

Using the GPT-4 model, you can ask the chatbot to analyze a cryptocurrency’s historical data or help you better understand a specific stock. You could also ask it to create a trading strategy for you and provide all the necessary parameters that you can crosscheck and trade with.

Furthermore, suppose a particular stock or coin has an uptrend, and you don’t want to put all your coins in one basket; you can ask ChatGPT to generate a list of tokens that are likely to perform similarly based on their historical data and buy them.

One thing to note is that the bot’s sentiment analysis isn’t that great, so the information it provides won’t always be accurate. That’s why you have to do some research yourself before making any trading or investing decisions.

Another way to use ChatGPT is to generate codes for a trading bot called ChatGPT trading bots. 


How to make a trading bot with ChatGPT 

If you’ve ever wondered how to make trading bots with ChatGPT, pay rapt attention. To create a trading bot using ChatGPT, you don’t need a paid Plus account, thankfully. You can use the basic version to do any of two options:

  • Generate code for a trading bot you can deploy on TradingView or
  • Generate code for a trading bot you can connect to your crypto exchange. 

While you don’t necessarily need coding experience to deploy a bot on TradingView, you need some programming knowledge to run a trading bot that works on exchanges.

Here are the steps you’ll need to follow to create a TradingView bot using ChatGPT:

  1. Create an Open AI account: To access ChatGPT, you’ll have to create an OpenAI account. Details like your email address will be required. 
  2. Test the chatbot: Set a precedent by typing in a prompt related to the task you want to accomplish. In this case, ask whether it can write code for a trading bot in Pine Script (the programming language TradingView uses).
  3. Request a code: If the answer it gives is satisfactory, request a code for a trading bot in Pine Script. Be specific with the kind of strategy you want it to use. Here’s a prompt example: “Create a simple Pine Script trading bot code incorporating a strategy based on the crossover of a 90-day Exponential Moving Average (EMA) and an RSI strategy.”
  4. Customize the code: Once you’ve gotten the code. Make sure to fine-tune it to your requirements. Include trading information like the risk-reward ratio you plan to use and other details about the trade. To do this, follow up the original prompt with another containing this information.
  5. Deploy the bot: When ChatGPT has generated the new code, including the latest information, integrate the code in TradingView.
  6. Backtest: Before you begin using the trading bot with real money, make sure to backtest it. Backtesting involves using historical price movements to see whether the bot would optimally fetch a profit under those conditions. This enables you to tweak the strategy until it’s good to go.

Generating crypto trading recommendations with ChatGPT 

Provided the proper prompts, ChatGPT can generate profitable trading recommendations. For this to work, you have to use the Plus version. An alternative is connecting the free GPT-3.5 version with an API that lets you manually feed the AI with specific data.

But that takes time and quite a bit of programming experience. So, it’s best to stick with just the Plus version. 

That said, here’s an example of a prompt you can use.

“My trading capital is $1000. Please devise a 90-day futures trading strategy for a SOL/USDT pair focused on risk management.”

You could provide more details, such as the specific technical indicator it should follow. That is, MACD, RSI, or Bollinger bands, among others. That should help it generate a strategy that promises profitable results. 

Generally, the more detailed your prompt is, the more specific the results will be. Asking the bot to generate these strategies from the position of a seasoned trader also works well. 

In addition, while longer time frames generally provide better results with lower risk, you can ask the chatbot to generate short-term strategies that you can paper trade. 

If you get a decent percentage of positive results, you’ll feel more confident executing the strategies it generates in the live market. 


Example of ChatGPT prompts for stock trading

For stock trading, you could ask ChatGPT to analyze a specific company’s annual filings to determine whether investing in their stocks is a good idea.

To do this 

  1. Visit the SEC website and search for a company filing you are interested in. 
  2. Download the filing in PDF format.
  3. Copy the necessary information and paste it into ChatGPT
  4. Ask the chatbot to analyze the filing and ask extra questions about it.

For instance, you can download Alphabet’s filings from September to December 2023. Then, copy the PDF’s content and paste it into ChatGPT.

Use a prompt like “This is Alphabet’s financial records for three months in the past year. Do you think their stocks are worth investing in? Also, can you generate a 9-month investment strategy based on your findings?”

This is just an example, and you can ask any questions, depending on your needs. 

Elevate Your Earnings: Discover Passive Profits with Automated AI Trading Bots
Elevate Your Earnings: Discover Passive Profits with Automated AI Trading Bots

Conclusion

ChatGPT can help you create trading bots that make money and even give you trading recommendations. Although ChatGPT itself isn’t a trading bot and won’t be able to connect to your exchange or TradingView, it can create a bot that you can hook up with TradingView. With the proper prompts, such as the ones we’ve provided in this article, you can get both trading bots and trading recommendations from the chatbot, maximizing its use for trading.

The information provided in this article is not intended as financial advice. Make sure only to trade crypto assets you’re comfortable with losing, as crypto market conditions can be unpredictable sometimes. Always consider setting relatively safe stop loss levels before engaging a set-up. While you may make a lot of profits using its product, Crypticorn is not liable for any financial losses you incur when trading.


FAQ

How to use AI in trading?

AI like ChatGPT can be used to generate codes for trading bots you can deploy on TradingView or your crypto exchange. You can also ask AI for trading recommendations for specific cryptocurrencies or stocks.

Can trading bots make money?

Yes, trading bots can make money. With the right strategy and favorable market conditions, trading bots can rake in profits for your portfolio.

How to use ChatGPT to make money

There are several ways to use ChatGPT to make money. Regarding trading, it can help you generate codes for trading bots, analyze the financial market and specific cryptocurrencies or stocks, and even give trading recommendations.

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