AI and ChatGPT Impact on Trading

foreign as a full-time Trader of over 12 years when I think about AI artificial intelligence chat GPT all these buzzwords that we're hearing about over the past couple of months and the popularity of these things there are three things that I think about and how it's going to impact me I want to know how can I make money trading the AI related stocks I want to know how is this going to impact my technical analysis trading and what kind of tools can AI be used for and number three how is this going to disrupt the financial industry in this video we're going to look at a bit of each of these topics and I'm going to give my opinions and experiences as to how I'm expecting this impact to Ripple across the financial industry so the first question how can I profit on AI stocks and sector hype and Euphoria I personally would consider my trading style throughout my 12-year career as a hype specialist that means I'm able to recognize hype in Euphoria and Buzz I'm able to jump in on that momentum see significant short-term gains and most importantly What Separates Me from other people is not making profit on these moves it's keeping those gains it's knowing when to get out it's knowing that I don't need to sell at the top and protecting the profit that I made along the way and a lot of that has to do with not falling in love with the sector or the stock because in my prior hype experiences which we're about to go over there are a lot of similarities that these sectors share and the number one is boom and bust cycles and that's because if you look at something like new technology 3D printing or a new sector cannabis as the laws change or a new technology crypto what these all share in common is again hype in Euphoria and social media Buzz everybody wants to get in on the next big thing but it's so much faster to click a button and see your money pour into one of these names versus the technology or the sector actually developing that takes years to play out whereas the buying and selling is extremely instantaneous so that means we see valuations in terms of market cap and we see the moves far outpace the technology meaning we get that huge boom we get that huge bust and that is constant and that is the number one aspect of trading is human emotions and so we see those on full display when we go from Euphoria to extreme fear and back again and my first experience in this was the 3D printing sector at this point it was 2013 I've been trading three years and so I was not very experienced and I did not capitalize on this opportunity but I watched it and by watching it I was then able to apply the lessons that I learned to the next hype cycle run that ended up coming along but this is 3D printing DDD and if you remember back then it's you know every every house is going to have a 3D printer and it's going to revolutionize everything and it's definitely had some impact in some sectors and it's definitely a cool technology but it is not nearly living up to the hype that we had back in 2012 and 2013. and so we can see that we ran up 800 in two years and then we gave it all back down 95 in less than two years after that just about two years so this is the very common way that this plays out hype in Euphoria and greed lock in your profit don't look for investments in my opinion in the early stages if you are going to be looking to invest you're looking at the companies that are already established like Google and Amazon and Microsoft who now has this deal with chat GPT and looking at those names that are already established if you want to invest right now because trying to pick the low cap names that are going to become leaders is extremely difficult and the probabilities of you choosing the right one are not high and every single hype sector that I've ever been involved in everybody wishes they sold and took profit there's nobody that says I'm so glad that I held and didn't take profit during the 80 to 90 drawdown that followed the hype in Euphoria another example is cannabis tlry yeah new stock couple of of months of trading it runs up over a thousand percent and then over the next year to two years we dropped 95 it's a tail as old as time this is the way that these hype sectors play out you've got crypto of course Bitcoin has done this multiple times we run thousands of percent we pull back 85 percent we run thousands of percent we pull back 75 percent it's a common boom and bust cycle because everything is so new and there is is so much Euphoria and greed surrounding these things that again the valuations go out the window when tlry that stock we just looked at in cannabis was trading at 300 it made absolutely no sense whatsoever with the market cap and valuation that was associated with the name at that point in time so trading opportunity in my opinion is using our technical analysis skills using our back burner trades we don't want a hype bull market we buy five minute oversold to look for hourly higher lows we buy hourly oversold if you're interested in this strategy check out chart guys back burner on Google that video will come up as the in-depth strategy for trading a bull market that works really well and that's what we're going to use to capitalize on these names so here's an example of a company putting out a headline and having the perfect combination of the right headline the right social media buzz and sharing frenzy to see a short squeeze take place and if you look at this name BuzzFeed bzfd they put out a headline on Thursday and they have line was buzzfeed's stock price skyrockets on news of the deal with meta to provide some content for them as well as a deal with chat GPT and they they're not going to have chat GPT write articles if you read in depth about what they're looking to do they're looking to utilize it for API and for other uses but again it was enough to get the attention of Traders and investors and the average dollar volume went from about three hundred thousand dollars a day to 600 million dollars a day being traded Thursday and Friday even more than that those are just very rough numbers so this is the hype in Euphoria but we have to keep in mind that when this name temporarily tops out sometime this coming week most likely it's going to pull back 30 percent and so we have to ensure that we're not chasing these moves we have to use our skills as Traders we have to have good risk management we have to utilize stop losses we have to ideally sell some some partial positions into profit to give ourselves cushion to work with so this right now this move is training the market hey Market this was a result of this headline keep an eye out for other headlines because we're going to see Traders and social media again the power of Twitter flock to names that have these kinds of headlines now and you're going to see a lot of companies start to put out these headlines one thing that is in common with other hype sectors is people will just I should say companies and executive teams will just throw these headlines into knowing they'll get a pump out of it what we saw in the Cannabis sector is a bunch of Dead Penny stockings dead mining penny stocks that you know dilution and convertible debt if you want to learn more about that Google chart guys dilution drives the price into the ground dead company oh hey we're going to change our business model and now we're interested in growing cannabis and suddenly their stock price rockets off the bottom for 300 so you have to take everything with a grain of salt which is again a reason I am trading moves versus buying to hold long term because so many of those companies again they just they know that they can capitalize on the buzz and Euphoria and so this is a perfect example other companies are going to do this so we have to remain protective but there is still opportunity on these names and you can be a number of ways to be keeping an eye on this is of course being in a chat room Community where everybody's watching for the AI headlines and sharing them as soon as they come across the wires uh looking on social media and following you know what names are hype watching you know Reddit and Wall Street bets what names are they focusing on and these are different social media tools that we can utilize to try and get on these small cap hype Runners before they get too overextended so this is another one where we're going to keep an eye out for first five minute oversold conditions for bzfd and I know there's probably going to be a day trade for me there when that happens or first hourly oversold conditions looking at those back burners so keep an eye out for other names and again a lot of names are going to start putting these headlines out so it's important to not get caught up in the story of these stocks and to take advantage of the volatility and the opportunity take your piece of the pie lock it in and move on to the next one is my opinion on the best strategy for trading AI hype sector so here is my current watch list for AI names that I have here in trading View and shout out to Red Devil and jungle Funk Joey who have helped compile these names and other chart guys members and you can see that with the hype that we saw in bzfd with the volume Thursday and Friday you go down these low-cap penny stock names look at the volume frgt so volume way higher than average definitely a correlation move and you look at VR AR the volume Friday standing out AI volume Friday so we now have a sector that is correlated and it's worth watching bzfd because it was the one that triggered this low-cap AI sector boom to end this past week and so when BC FD tops out temporarily and starts pulling back we're going to be watching for the same thing to potentially be happening we have to watch the correlation between sector peers to start to observe Clues and things like that so I'm not going to go through every name on this list it's very extensive I'm in the process of curating it I'm going to ditch names that don't meet my criteria in terms of you know either their technical setup or I'm not going to be interested in something that's under a dollar personally but check out this list hit pause on the video if you want to add all these names there's a bunch of them this is the second third of the list and then scrolling on down that's the rest of it so long list going to chop it down a bit but these are the names that I'm currently keeping an eye on in the AI sector so how can we utilize Ai and chat GPT as a tool for our trading there are certainly a number of ways to do this Jason with the chart guys is going to put out a more in-depth video showing you a step-by-step process of how to input a prompt into chat gbt have it spit out a pine script code for you and then you can back test that code and see how it works out so keep an eye out for that and if you have any suggestions about what kind of parameters you would want the trade to have for example I can input it'll give me a pine script trading strategy using RSI Bollinger Bands and EMA 12 and it will then you know spit that out that I can then put it back into trading view so if you have any suggestions for parameters or something you would want to see him play around with feel free to share that in the comments of this video he's going to be making that video this coming week but I just want to show you some examples of what we have now on YouTube where if you search using chat GPT for trading you're going to find a whole lot of videos that look like this trading strategy insane best Scout helping strategy how to become rich 88 win rate two thousand percent Returns what does this tell us this tells us a number of things number one people are searching for this content because the YouTube algorithms are rewarding content creators to put out this kind of content with these kind of headlines if you look at these individual videos and you compare the number of views on these channels to their other videos you will see that for the most of them there are multiple hundred percent or even thousands of percent increases from the average views showing us that the YouTube Algos are putting this in front of a lot of people's eyes number two we know that a lot of these are going to be BS videos this these videos are trying to capitalize on again utilizing the Algos but also people want to get rich quick I don't have to trade I can just use chat GPT and enter some information and it can trade for me and I can make money realistically we know it's not going to be that easy that's not the way that the trading being game works so here's an example of a visual of this current hype wave in terms of Google Trends and the search term chat GPT for trading and we can see a couple spikes over the last year but the last month it's taking off and that's what is the wave that is being written by these content creators myself included with this video it's it's definitely visualized here over the last month of Interest spiking big time so in my opinion yes this is a tool that Traders can utilize no this is not something that someone who is not a Trader can just type in you know a couple phrases and get a trading profitable trading strategy given to them that's going to work over the long term so I think it would have a long way to go before we could get anywhere near that but again everybody's going to be looking for that golden ticket you know no work input just give me free money printing kind of scenario so what an advanced Trader or what someone with trading experience and with the foundation of information can utilize this for I can go into tradingview and I can and look at the different scripts and I can say okay let's go to the indicators let's go to the community scripts fair value bands all right field fair value bands sometimes we get the code available to us we click the source code and that opens up this code down here and I can then copy this code and put it into chat gbt and say hey chat gbt simplify it for this for me tell me what's going on and it can reverse engineer the code a little bit and say this code is based on you know these indicators and these parameters and it can give us more detailed information so again we can utilize our education as traders to use this as a tool but it's not going to be the kind of tool that you know just solves trading for everyone so how is AI and chat gbt going to shake up the financial sector we know it's going to shake up a ton of sectors it's going to replace a lot of jobs it's going to change society and all we can do is guess and speculate because we don't know just like when the internet first came out we could have no idea the widespread implications on society that the advancement of the internet was going to have and it's the same thing with AI in my opinion some of it's scary some of it's going to be beneficial like everything there's going to be positives and negatives that come from it in my opinion as I've already mentioned Traders can utilize it as a tool it will impact the trading game and it's going to be up to us to adapt and evolve with it just like social media when I first started trading I didn't use Twitter but over the last five years Twitter has become a major tool that I utilize to to keep an eye on setups to share information with other individuals to get information from other individuals that give me some trade ideas and things like that in my opinion the biggest risk is towards Legacy financial sector and what I mean by that is I mean retirement planners and things like that because what allowed for that side of the industry to thrive for so many decades was exclusivity where you know they want you to think this stuff is too complex for you to understand you need to give us your money to manage for you because we know better and as technology has developed we know that that is changing if if I started to explore trading in 1990 instead of 2010 I would have had way more hurdles it would have been very difficult for me to connect with other individuals to share information and help them guide me down my education and I wouldn't have been able to teach myself so much would have of what I did through Google and articles and YouTube and so it's empowering the individual and that's a great thing and so I think that someone like a financial planner or a retirement planner is at risk here if I can go on chat gbt and say give me an example of a diversified best top 10 performing dividend stocks explain to me the seasonality in the Commodities all these things are going to be at our fingertips and again we're not going to need to go to an office and sit down and talk to the dude in the suit to tell us what we should do with our money we're going to have that information readily available so I look forward to the changes I don't know what they're going to be but I know that we're going to do our best to stay on The Cutting Edge and to stay on top of this and again we can't be a stagnant Rock in the river we've got to move with the flow and we've got to adapt and so that's what we're going to do that's what we've been doing over the last seven years eight years with the chart guys and we look forward to continuing that Journey with you I appreciate your attention and the likes and the shares and all your support we'll look forward to seeing you soon

Channel: TheChartGuys

Views: 4,722

Keywords: stock market, stock market today, stock market crash, stock market news, stock trading, stock price, investing strategies, investing news, sp500 emini, sp500 etf, nyse, nasdaw, bitcoin, btc price, crypto, cryptocurrency, stock portfolio, volatility, technical analysis, recession 2020, market correction, us stock market crash, top stocks to buy

Id: 2zjKe-eFtGI

Length: 17min 2sec (1022 seconds)

Published: Sun Jan 29 2023