Chat GPT Coding - Make A Profitable Trading Strategy In Five Minutes!
You can easily generate trading view pine script code with just a few natural language prompts. Say goodbye to the tedious task of manual coding and hello to faster and more efficient strategy development. Let's learn how chat GPT can revolutionize your trading view workflow. Chat GPT as a natural language processing tool or NLP tool developed by Openai.
It is based on the GPT three language model, which is a machine learning model that has been trained on a large dataset of text All we need to do is go to openai.com and click try chat GPT. You'll need to create an account. You can sign in with Google or create your own unique username and password. Here's the fun thing about chat GPT. It's completely free.
Now if you want to use an API key and use chat GPT in your own projects or apps, you will need to pay for that usage. But that's very cheap and we'll cover that topic in a different video for what we're going to do today. It's completely free. Once your account is set up, you can use Chat's GPT by providing it with a natural language prompt and specifying the type of output that you want.
Chat GPT will then generate the output based on the prompt which you can review and modify as needed. For example, we can ask GPT. Hello. What can you do? And it will respond that it's an AI train to assist with a wide range of tasks.
Overall chat GPT is a powerful tool for generating text and code based on natural language prompts. It can be used to speed up development and prototyping and can also be a useful learning tool for those who are new to programing. TradingView Pine Script is a programing language used to create custom technical indicators. And automated trading strategies for use on the Tradingview platform. It is based on the pine programing language and is designed to be easy to learn and use. With TradingView Pine Script. Users can create custom indicators to analyze market data and identify trading opportunities.
These indicators can be plotted on charts alongside other technical indicators and overlaid on top of price data. In addition to custom indicators, trading view Pine Script can also be used to create automated trading strategies. These strategies can be back tested on historical data to evaluate their performance and can be set up to execute trades automatically based on predetermined rules. Tradingview Pine Script offers a wide range of features and capabilities, including support for various data types built in mathematical and statistical functions and the ability to create custom user interfaces. It is a powerful tool for traders and investors who want to analyze and trade financial markets using custom technical indicators and automated strategies.
Using chat GPT to generate pine Script code can be a useful tool for quickly prototyping and testing ideas and trading view. It can also be helpful for those who are new to Pine Script and want to learn how to code custom indicators and strategies. Here are some examples of how chat. GPT can be used to generate pine script code. First off, it can create a simple moving average.
Let's ask Chat GPT to generate pine script code to create a simple moving average of the closing price. With a period of 14 days, not only will chat GPT explain exactly what it's doing, it will give us the actual code, that we can simply copy and paste directly into trading view. So let's copy this code. Come over to trading view, open up our Pine editor and we'll paste this in. And the only change we need to make is we need to change the color to color dot orange and we just need to put Ta.
in front of the sma function because we're in V5 of Pine Script. And we will add this to our chart and we've got our simple moving average right there. Very easy. We can also ask Chat GPT so that we don't run into those issues the same query generate pine script code to create a simple moving average of the closing price with a period of 14 days that is compatible with V5 of pine script and uses color dots before any color argument and ta. before for any
SMA arguments. So as you can see by simply telling Chat GPT to make a few changes to the code it generated, we can get code that works completely correctly. On the first try, let's try pasting all this in overriding our code and we can see it's the same thing as the changes we made. So it's going to work just fine out of the box. We can also use chat GPT to generate more complex ideas, for example, like letting us know when there's been significant increases in volume. So let's ask Chat GPT to generate pine script code that turns the background color green.
When volume is 50% or greater above the volume moving average with a period of 14 days. So as we can see, Chat GPT has just generated code that will calculate our volume moving average and analyze whether or not current volume is 50% or greater than the volume moving average. Let's copy this code over to trading view and paste that in there and we'll add that to our chart. As we can see, all we need to add is the ta. in front of our SMA command.
Now let's add it to the chart. And as we can see now, we can see on the chart, if we remove our two previous scripts, we can see very clearly when there are significant increases in volume because trading view will turn the background color of our overlay or excuse me, our underlay indicator green. So identifying high volume moves is very important for spotting significant moments in the market. So Chat GPT has helped us identify very significant moments in the market within a few minutes. But Chat GPT isn't just limited to developing indicators or simple things.
We can create fully automated trading strategies with Chat GPT. Automated trading strategies are a type of program that can be used to execute trades automatically based on predetermined rules. These strategies can be back tested on historical data to evaluate their performance and can even be set up to execute trades in real time based on current market conditions. Using pine script and chat GPT, you can quickly and easily develop automated trading strategies that can be used on the Trading View platform. Let's talk about the most common components of an automated trading strategy that you'll need to create with chat GPT entry and exit conditions are a critical component of automated trading strategies as they determine when the strategy should enter or exit a trade. These conditions can be based on a variety of factors, including technical indicators, price patterns or other market conditions.
Let's try prompting chat, GPT with generate Pine script code to enter on a macd crossover Chat GPT has generated some code for us to enter on MacD crossovers. However, let's ask it to refine this code a little bit. Rewrite that to use strategy dot enter and strategy dot exit functions. Instead of using the position variable.
Great. So we can see the chat GPT has generated or rewritten code based on the inputs that we gave it. We can simply copy this code over to trading view.
We'll paste this in and the only change will make is will change indicator to strategy. And we will add this to our chart. And we have one issue where it did not include this variable in brackets and it did not use the ta. in front of the MacD, We can also go ahead and get rid of this plot because we don't want anything plotted. We just want to trade.
And look, we were able to generate for the most part a very profitable strategy. But that's just the start Position Sizing is the process of determining the size of a trade. That is the number of shares, coins or contracts to purchase based on various factors in automated trading strategies. Position sizing can be used to manage risk, optimize returns and ensure that the strategy is well-suited to the size and risk tolerance of the account. When determining position size, you should consider the following factors.
Risk tolerance is the amount of risk that you are willing to take on. Higher risk tolerance will allow for larger position sizes, while lower risk tolerance will require smaller position sizes. The size of your account or the amount of capital you have available for trading will also influence your position.
Sizing larger accounts may be able to handle larger position sizes, while smaller accounts will need to use smaller position sizes to manage risk the potential reward of a trade. That is the difference between the entry price and the target price should be balanced with the potential risk. That is the difference between the entry price and the stop loss price. A trade with a higher risk to reward ratio may justify a larger position size, while a trade with a lower risk to reward ratio require a smaller position size to implement positions sizing in an automated trading strategy using Pine Script in chat GPT, Let's prompt chat GPT generate Pine script code to determine position size based on a risk tolerance of 2% per trade, an account size of $1,000, and a risk to reward ratio of 2 to 1.
Excellent chat GPT has generated the code that we need to use those factors to calculate the appropriate position size for our strategy. Risk management is the process of using techniques and tools to manage risk and protect against potential losses in trading or investing in automated trading strategies. Risk management is critical as it can help to ensure that the strategy is able to weather market fluctuations and preserve capital.
There are many different techniques and tools that can be used for risk management in automating trading strategies, including stop loss orders that are placed at a predetermined price level to automatically exit a trade if the market moves against the trader. These can help minimize loss and protect against large unexpected price movements trailing stops which are stop loss orders that are set at a percentage or dollar amount below the market price. And that move with the market price as it changes, trailing stops can help lock in profits as the market moves in your favor and help you protect against large price reversals. And as mentioned above, position sizing can also be used as a risk management tool by limiting the size of a trade based on factors such as risk tolerance and account size, traders can manage the level of risk that they are taking on to implement risk management techniques. We could prompt Chat GPT to generate Pine script code to implement stop loss orders at a value of 5% and trailing stop stops at a value of 2.5%
for risk management. Excellent Chat GPT has generated the necessary code. We need to implement an effective stop loss and trailing stop loss in our trading.
view strategy By implementing effective risk management techniques, traders and investors can improve the performance and reliability of their automated trading strategies and better navigate the risks and uncertainties of the market. So let's create a simple strategy with GPT three, including all the elements that we just discussed generate a Pine script strategy backtest that enters into trades on MACD crosses determines position size based on a risk tolerance of 2% per trade, an account size of $1,000 and a risk to reward ratio of 2 to 1 uses a 5% stop loss order and a 2.5% trailing stop loss order with a take profit order of 10%. Okay, fantastic. It's looking like we have a really robust strategy here.
Let's just make a few changes based on my personal experience. So that I know that this will work properly in trading view use strategy dot position underscore average price instead of close to calculate stop loss points and trailing stop points. Remove the strategy dots in front of stop and the stop type argument or the strategy exit function. Plot our position size as a label above the current bar instead of as a instead of a plot and include the definitions and include the necessary definitions for the Macd the at the beginning of the code and add a strategy header above that. All right. This is looking really good. We could continue to make some necessary changes here in chat GPT We're going to go over to trading view.
We're going to go to our Pine editor we’ll maximize our Pine editor and we're going to paste all of this in here. So we're setting in this first part, we are setting the risk tolerance, account size and target profit levels. This is all good. We're calculating our Mac D here again, it made the same issue where it didn't enclose this into a bracket and it didn't do the TA dot. That's fine. We'll add that for it. It did use the strategy position average price for the stop loss, but we do want to use close for trailing stop loss points.
So for our strategy exit, it got the argument wrong. It's actually stop equals our stop price and Chat GPT is not great at math, so sometimes it will make mathematical errors. So for example, it got the calculations on our limit price incorrect. So we'll just fix this by saying our limit price is strategy position limit price equals strategy position average price plus strategy position average price times. We can do 0.1 to include 10% If we wanted it to be
using all the code we put in, we could do target profit divided by 100 it’s the same thing and the label new. And for the Y, we're going to include high. That's the only thing we need to include. There and get rid of this bad boy right here string to string. And this is limit.
This is math dot. This is to our math dot floor. Okay. And that's all looking good. Couple of minor changes.
And here we go. And we've got a strategy. We’ve actually got a significantly more profitable strategy than the last one that we created. So we were able to create in about 5 minutes or less a robust, simple pain strip strategy using correct position sizing and using advanced risk management, including trailing stop losses, stop loss and take profit order. Now, we could get as advanced as we want with this or as simple as you want to get with it.
But Chat GPT isn't just limited to generating simple strategies. You can use it to create truly robust and complex trading strategies in pine, one of chat GPT’s best features is its ability to learn, let's say you don't want to use the basic stock indicators available on trading view and you want to use your own custom indicators or open source strategies or scripts in your trading strategy. You can plug them in the chat GPT and ask chat GPT to manipulate them as you see fit.
Let's see that in action. So here I have my VWMA/SMA divergence detector strategy. Now this is a heavy piece of code that I have written a lot of content on over the last month, so let's copy this whole strategy and paste it into Chat GPT and see what happens. The following is a pine script strategy that I wrote, so Chat GPT was very helpful by understanding every little bit of the code that I gave it and summarizing every aspect of the trade for me over four paragraphs.
So this is another great feature of Chat GPT If you are new to code or you're having trouble understanding what a particular part of code that you're looking at does paste it into Chat GPT and ask it specific line by line or section by section what that piece of code does and how you can make changes that you want. Now I'm going to ask GPT, how could I rewrite my code to include a requirement that volume have increased at least 50% before entering into a trade? Excellent. We can see that after giving me a basic idea of how I could write the desired code into my strategy, it went on and showed me specifically where and how in my code to make the desired change. The possibilities here are only limited to your imagination when using Chat GPT to generate trading view Pine Script Code. It is important to follow best practices in order to ensure that the generated code is accurate, reliable and easy to use.
Here are some tips and best practices to consider. Ensure that the generated code is syntactically correct. GPT is not perfect and the generated code may contain errors or syntax issues.
It is important to review the generated code carefully to ensure that it is correct and free of errors. If you encounter issues with the generated code such as errors or unexpected behavior, you will need to debug and troubleshoot the issues in order to resolve them. This will involve reviewing the code, checking for syntax errors and testing different inputs. And most importantly, the quality of the generated code will depend on the clarity and conciseness of the prompts that you provide to GPT. It's important to be specific and descriptive in your prompts and avoid using overly complex or ambiguous language before using the generated code in a live trading environment.
It is important to test it thoroughly to ensure that it is accurate and reliable. This may involve back testing the code on historical data and testing it with different inputs and scenarios. By following these tips and best practices.
You can improve the quality and reliability of the code the chat GPT generates and make the most out of this powerful tool. Chat GPT is a powerful tool for generating tradingview Pine script code quickly and easily by simply providing natural language prompts and specifying the type of output that you want. You can use chat GPT to generate code for a wide range of tasks, including creating custom indicators, plotting charts and developing automated trading strategies.
While chat GPT can be a useful tool for speeding up development and prototypes, it is important that you review and modify the code as needed to ensure that it is accurate and meet your needs. And above all, make sure you test the code thoroughly before you use it in a live trading environment. Overall, chat GPT is an invaluable tool for traders and investors who want to save time and effort on coding, custom technical indicators and automated strategies for trading view. With its ability to generate pine script code based on natural language prompts, chat, GPThas the potential to revolutionize the way that traders and investors analyze and trade financial markets.
2022-12-31 00:26
