My AI Investment Experiment (Stocks and Crypto edition)

Trading Discussion Trade Journals
#1

Hello! :wave:

Few months ago I heard about AI and started to investigate if it could be useful to trade. I’ve been using artificial intelligence to invest in the market for a while now.

I believe that incorporating technology like this into our investment strategies can help us make better decisions and ultimately lead to more success in the market. While we should still use our own criteria, understanding opportunities in an objective way is saving me tons of hours of research.

Currently, I’m using AI to get market predictions chances and get investment ideas, all from free sites. Do any of you know of other free services where you can receive investment opportunities or simulate market movements based on AI and past data?

I’ll keep you all updated on my progress and I’m looking forward to hearing your thoughts and experiences with using AI for investing.

I’ll try to post this week’s trades today :slight_smile:

Happy trading!

Edit:

Current results:

  • 2 AI ideas posted with entry and exit points:

→ BTCUSD Idea has locked in a 1,5% profit in 1 single day and leaves an option to earn up to 13,5% profit in the upcoming days if the channel breaks upwards as expected.

→ BNS idea is by now flat. We need a consistent upward break, but the market is choppy.

  • Non finished yet
#2

I’m going to guess that this was written by AI.

#3

Hi! I assume you never used AI to invest yet. I’m using it just to avoid looking for opportunities among the broad market, but at the end I trade based on price patterns. Now I have a second opinion on market probabilities and it’s being excellent for risk mngmnt. I’ll post some trades later!

Regards
Rtme

1 Like
#4

Hi and welcome,

I will be watching out for your posts. I too have a keen interest in AI, in particular ChatGPT4, but I have so far resisted trying to apply it to my Forex pursuits. At the moment, I am still trying to understand the enormity of the prompt engineering capabilities. Best of luck with applying AI to Forex.

#5

That’s nice! Thank you for the topic. I’m curious to know more, so yesss, please keep us updated on the progress. Additionally, it would be great if you could explain how you utilize AI for the purposes you mentioned.

#6

#1 Trade idea generated by AI

Current Market Situation (3/10)

BNS is clearly in a large downtrend, so opening a large position is only possible in the short term. That’s why we should also take into consideration the possibility of breaking downward and joining the crash. Anyway, as we will see later, the fundamentals to try the long position are good.

bns_stock
bns_stock2004×1072 125 KB

Patterns found by AI (8/10)

After multiple bottoms in the 45-47$ area, two lovely patterns have arisen.

  1. A continuation triangle that could move the price at least to 53$. We have recently seen the price break the trendline, so an upward movement is likely.
  2. A double bottom that would be valid if the price breaks 50.9$. If that happens, we have a very high probability of seeing the expected 53$. Losing 47.9$ is a signal that the patterns have failed and the downtrend is returning faster than expected.

AI models confirmation (6/10)

When we run the AI models, we see that historically this kind of market movement is not very bullish; it’s more common to see some downside before we see bigger prices. So take care with pullbacks and be ready to use your tight stop loss. There is no strong historical evidence for rallies in this kind of pattern.

bns 3
bns 31870×736 121 KB

bns 2
bns 21860×751 122 KB

Risk Reward (7/10)

The Risk reward is quite good as we can earn 3 times the risk. Furthermore, if the price breaks the double bottom upwards, the probabilities of reaching our 7% target of benefits increase a lot.

Conclusion (6/10)

This is a good trade, but there are multiple issues that need to be addressed. The trade is against the long-term trend and AI models are predicting lateral movements. On the bright side, we have clear patterns, a good chance to arrive at the target price of 53$, and also a tight stop loss that helps us to handle a good risk/reward ratio. Furthermore, if the price breaks down, we can do a counter-trade to profit from the crash.

#7

Current Market Situation (7/10)

BTCUSD started a new trend this January after breaking a very big falling edge pattern and is now bullish. The 25,000$ is a key support to maintain the bull trend, so opening long positions makes sense in this market, especially when we look for short to mid-term profits. On the other hand, the market was acting as a bubble for a few years, so a lateral or down movement in the long run is the most probable scenario (like after the dot-com bubble, 2008 crash or whatever rally you want to analyze).

btcchart
btcchart2001×1074 222 KB

Patterns found by AI (6/10)

After a rally, we have seen some consolidation in a lateral movement, creating a clear support in the 24-25k$ zone. A channel or flag is unfolding so an upbreak would be a great bull signal at least until the 30k$ area where BTC will fight to decide if the rally continues or a double top is created.

AI predictive model confirmation (7/10)

When we run the AI models, we see that historically this kind of market movement is bullish as you can see in the white charts (the blue line is the prediction and the red is the current market behavior). A bit more lateral movement is possible, but a rally should start soon. Please note that we want to take profit at the 30k$ area because it is a major resistance and we want short-term profits to keep our capital working as fast as possible.

btc1_a
btc1_a1864×742 98.8 KB

btc2_a
btc2_a1864×742 105 KB

Risk Reward (8/10)

The Risk reward is quite good as we can earn over a 15% risking less than 5%. Take care with BTC because it’s always quite volatile and the stop loss placement is crucial to avoid fake breaks against our position.

Conclusion (7/10)

This is a very good trade, with a market supporting our idea, support near our buy point and a very favorable risk-reward ratio. This kind of trade is always difficult because the stop is tight and some volatility could break our trade even when the end result is a rally to 30k$ area. Anyway, the odds are on our side so this kind of trade is profitable in the long run.

#8

BTC moved to the support area of 24-25k$ as expected and now is moving up a great 7%.

image
image2002×1077 144 KB

Now the price has to break the channel up to keep rising and get the final profit of 20%.

BUT, there si a great risk management techinique to avoid losing much potential and lock in a 1,5% profit in 1 day trade, which is an amazing amount of money for 1 day.

In the image you can see a current profit of 7%, a stop loss in the -4% and a potential of 20%.

By selling half of the position now I get a certain 7% for half of my investment in 1 day. The other half would be waiting the final outcome of either a major profit of 20% or a loss of 4% in several days.

So the outcome will be:

Best scenario: 7% * 50% + 20% * 50% = 13,5% Profit
Good scenario: 7% * 50% + -4% * 50% = 1,5% Profit
Bad scenario: Do not exist anymore!

There are also ways to do this with options and could me more optimal, but this is much easier to understand.

Remember the rule number one, never lose money :wink: