Implementing a ChatGPT Trading Strategy: A Step‐by‐Step Guide

Summary

Utilizing advanced algorithms and machine learning, AI tools like ChatGPT have opened the door to more nuanced and dynamic trading strategies. These strategies go beyond traditional data analysis, delving into sentiment analysis and predictive modeling, which have become increasingly valuable for today's fast‐paced markets. This chapter provides a clear pathway to implement AI‐driven trading strategies. Before implementing a trading strategy driven by artificial intelligence, certain preliminary steps must be taken to set it up for success. It is necessary to establish clear investment goals before implementing any trading strategy. Backtesting involves applying the trading strategy to historical data to determine how it would have performed in the past. Risk management is integral to the strategy's implementation. Real‐time adjustments help ensure that the strategy meets its market neutrality and portfolio limit objectives. Employing AI in trading is a complex undertaking that requires a blend of technical expertise, financial acumen, ethical awareness, and regulatory knowledge.