Hello Traders,
Welcome back to my channel. ChatGPT is going completely insane. This AI service can create website apps, mail plans, and it can even teach you how to code. But what about business? Can ChatGPT create a highly powerful trading strategy with low risk? We went ahead and asked him to do so. We also named the indicators on which our strategy should be based.
ChatGPT wrote a complete trading strategy with entry rules and money management in just a few seconds, which really blew our mind. So we went ahead and followed the instructions.
The first step was to choose a trading instrument and a time frame. ChatGPT suggested that we should apply this strategy on the GBP/USD on the five-minute time frame. We will see how well the strategy performs on other time frames as well, so stay tuned.
The next step will be to add our technical indicators to the price chart. So open the indicators menu and find the first indicator, which is the Money Flow Index (MFI). The MFI is a technical analysis indicator that measures the flow of money into and out of a financial instrument. It ranges between 0 and 100, providing insights into the strength of buying and selling pressure in the market. We’re using a modified version of the MFI, where red or green circles indicate oversold or overbought conditions.
The next indicator we’re going to add is the Engulfing Candle Indicator. This indicator is used to identify potential trend reversals in financial markets. The bullish engulfing pattern occurs during a downtrend and signifies a potential trend reversal to the upside. The bearish engulfing pattern occurs during an uptrend and signifies a potential trend reversal to the downside.
For the third indicator, let’s add the Exponential Moving Average (EMA). We’ll use a length of 200 to filter out minor price fluctuations. The EMA is often used to identify trends and potential support or resistance levels.
Now that we have all the indicators on the chart, let’s proceed to the entry conditions. For long trades, we should first identify a bullish trend, have the MFI oversold, and have a bullish engulfing pattern form. We should enter long positions on the next candle as soon as the bullish engulfing pattern is formed. The stop loss should be placed at the low of the bullish engulfing pattern.
For short trades, we should first identify a bearish trend, have the MFI overbought, and have a bearish engulfing pattern form. We should enter short positions on the next candle. The stop loss should be placed above the bullish engulfing pattern.
We tested some of the signals given by this strategy on EUR/USD on the 15-minute time frame. The strategy has a high success ratio and uses smart money management. However, no trading strategy is perfect or guarantees success. It’s essential to backtest and demo trade the strategy before using real money. Additionally, be prepared for periods of drawdown and always trade with proper risk management.
Traders, our video has come to an end. We hope you find it useful. If you haven’t yet subscribed to my channel, kindly consider doing so and activating the notification bell to stay informed about my upcoming content. See you guys in the next video and good luck with your trading. Thanks for watching our video.
