ChatGPT Trading Strategy Never Loses

we recently asked chat GPT about the best trading strategy featuring macd and RSI and the answer really surprised us it outlined the exact rules for entering long and short trades and how to manage our money in this video we will explain the strategy in detail and give you a bunch of trade examples we will also make our own changes to the strategy so that you get more accurate trade entries Traders before we begin please take a moment to like this video for YouTube's algorithm also subscribe to our channel for more magic indicator strategies in the future okay so before we explain how this trading algorithm given by chat GPT functions we need to add the following indicators to the price chart the strategy uses three free scripts moving average convergence Divergence relative strength index and irregular moving average so open the indicators and search for the first one which is macd select this indicator right here the moving average convergence Divergence indicator is a popular technical analysis tool used by Traders to identify Trend changes and potential buy or sell signals in the financial markets it consists of two lines the macd line and the signal line the macd line is calculated by subtracting the 26-day exponential moving average EMA from the 12-day EMA the signal line is a nine-day EMA of the macd line when the macd line crosses above the signal line it is considered a bullish signal and Traders may consider buying conversely when the macd line crosses below the signal line it is considered a bearish signal and Traders may consider selling the macd indicator can also be used to identify divergences between the price and the indicator which can indicate potential trend reversals the next indicator we need to add to the chart is called the relative strength index or RSI the relative strength index RSI is a technical analysis tool used by Traders to measure the strength of a Stock's price action it is a momentum oscillator that measures the speed and change of price movements ranging from 0 to 100. an RSI reading above 70 is considered overbought which means that the stock may be due for a price correction or reversal conversely an RSI reading below 30 is considered oversold which means that the stock may be due for a price rebound or reversal the RSI is calculated by comparing the average gains and losses of the stock over a specific time period typically 14 days Traders may use the RSI indicator to identify potential buy or sell signals for example if a stock has an RSI reading above 70 it may be overbought and Traders may consider selling conversely if a stock has an RSI reading below 30 it may be oversold and Traders may consider buying RSI will be used as a secondary confirmation indicator in our strategy lastly open the indicators one more time and search for a moving average choose this indicator Traders use moving averages to identify potential Trend changes and to determine support and resistance levels for example if the stock price is trading above the moving average it may be considered a bullish signal indicating that the stock is in an uptrend conversely if the stock price is trading below the moving average it may be considered a bearish signal indicating that the stock is in a downtrend chat GPT mentioned that we should use a moving average with the length set at 20. so let's access the indicator settings and change the parameters [Music] the trading rules suggested by chat GPT are as follows step one we need to determine the trend direction using macd this means that we should look for a crossover of the macd line and the signal line a bullish crossover occurs when the macd line crosses above the signal line indicating a potential uptrend a bearish crossover occurs when the macd line crosses below the signal line indicating a potential downtrend once the trend direction is identified we need to wait for a retracement to the 20 period moving average The Next Step will be to confirm the trend using RSI we basically need to look for oversold or overbought conditions an RSI reading below 30 indicates oversold conditions while an RSI reading above 70 indicates overbought conditions if the trend direction is bullish we have to wait for oversold conditions to enter a long trade if the trend direction is bearish we need to look for overbought conditions to enter a short trade we tried to find a valid trade entry that would meet these requirements however we couldn't the RSI simply does not get oversold or overbought at the retracement to the moving average but when it does the trend direction is completely changed in order to fix this we need to access the settings on RSI and change the length from 14 to 10. we also need to adjust the RSI upper and lower bands to 60 and 40 accordingly in addition the moving average length will be changed from 20 to 100. this way we make sure that minor price fluctuations do not affect the longer term trend once the changes have been made we can start looking for buy and sell signals so in order to enter a long trade the following conditions must be in place first the price must retrace to its 100 moving average this is necessary to make sure that we're not buying overbought stock second the RSI must be oversold during the price retracement third the macd must issue a bullish cross the cross needs to happen below the zero line this is very important finally at the time we have across the price must close above the 100 moving average a strong bullish candle bar must be formed enter a long trade at the close of the Candlestick and Target two times the risk as suggested by chat GPT set the stop loss below the recent swing low adjust the stop loss to break even once the price has moved in your favor here's another example of a long entry watch how all the rules are met for a short entry do the opposite to begin with wait until the price has retracted to its 100 moving average then take a quick look at the RSI it must be overbought the next step is to check the macd a bearish cross must be present above the zero level lastly make sure the closing price is below the moving average at the time macd gives a signal place a sell order at the close of the price bar and Target two times the risk set the stop loss above the recent swing High Traders if you're enjoying this trading strategy don't forget to like this video make sure to back test this strategy on every time frame and Market you're willing to trade in this way you will gain full confidence in placing trades when trading live trading is a probability game your goal is to use an algorithm that gives you an edge in the market we believe the strategy presented in this video can be highly effective when trading Forex Pairs cryptocurrencies and stocks thanks for watching this video till the end best of luck

Channel: Magic Indicator Strategies

Views: 38,305

Keywords: best indicator for scalping, tradingview indicators, scalping trading strategy, forex trading strategy, algo trading, tradingview, technical analysis, best tradingview indicator, best tradingview indicator for scalping, price action, scalping strategy, scalping forex, 5 minute scalping strategy, tradeiq, tradingview tutorial, chatgpt, ai trading, artificial intelligence

Id: HHcCsT_U2gY

Length: 8min 53sec (533 seconds)

Published: Sat Feb 25 2023