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Revolutionising Forex Trading: How ChatGPT is Changing the Game

Fusion Markets

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Getting an edge in Forex trading is the golden goose every trader pines for. While there have been many technological advances that have given traders an edge over the decades, FX traders are now looking toward what is fast becoming the biggest revolution in Forex: AI, and in particular ChatGPT. A seemingly magical AI that can produce articulate and human responses to almost any inquiry.  

It looks like ChatGPT is taking over the world, one chat at a time, and it can do anything you can only imagine (besides ordering pizza, but let’s not get too greedy). So, let's dive in and see how ChatGPT and AI are revolutionising forex trading, and how you can use this amazing tool to give you an edge in the markets. 


Unlocking the Benefits of Using ChatGPT 

So how can the chatbot improve your trading? Let’s take a closer look at what this Forex AI is capable of: 

  • Analysing Assets 

Now, I know what you are thinking. "How on earth can a language modelled AI help me analyse my assets?" Well, ChatGPT is no ordinary language model. It has been trained on massive amounts of data, including market trends, economic data, and news events. This means that it can analyse all the factors that affect the value of your assets and provide you with insights that can help you make better-informed decisions but be careful it only uses data up until 2021.  


The simple example above demonstrates what kind of information the chatbot can provide on the GBP/USD currency pair. Not bad, right? Well, why do not we try and get a little more advanced. 




How about even more granular? 



Now we are rolling. These are all simple 2-minute entries, but you can get as deep and detailed as you want - you are only bound by your own imagination!  

If you would like to learn more the GBP/USD, do not forget to check out Fusion Market’s article with a detailed overview of this asset. 


  • Creating Scripts 

ChatGPT has the potential to assist in the development of scripts that can be utilised by automated robots for trading purposes.  

While using the chatbot to generate an automated trading strategy, you have the liberty to employ more than one indicator.  

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The script above retrieves historical data for AUD/USD from Yahoo Finance, calculates two moving averages (SMA10 and SMA50), generates trading signals based on the crossover of these moving averages, defines trading positions based on these signals, executes trades based on a simple position sizing strategy, and plots the trading signals and positions on a chart.  

Furthermore, although Python was used in this context, you have the option to ask for scripts in alternative programming languages like MQL4 and MQL5 for the MetaTrader platforms, or Pinescript for TradingView. 

But do not get carried away by the power of technology! Please note that this script is for educational purposes only and should not be used for actual trading without proper testing and risk management. 


  • Providing definitions and Explanations of Forex Trading Concepts 

Forex trading has a unique vocabulary that can be confusing for beginners. Chat GPT can provide definitions and explanations of forex trading terms and concepts, helping traders understand key concepts like pips, spreads, leverage, etc. 

However, one of the drawbacks of relying on the chatbot to clarify investing concepts is the difficulty in verifying the accuracy of its outputs. Since there are no credible sources listed or citations provided, users are left with no option but to rely on the correctness of ChatGPT's responses. That is why we highly encourage you to always verify the information through multiple sources. 


  • Sharing Forex Trading Tips and Strategies 

Chat GPT can provide forex trading tips and strategies that traders can use to improve their trading skills. These tips can cover topics such as risk management, technical analysis, and fundamental analysis. Traders can ask questions about specific trading strategies, and it can provide detailed answers based on its vast knowledge base. 

The example below illustrates how the chatbot broke down the fundamentals of a swing trading strategy and outlined the initial steps: 

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  • Offering Personalised Recommendations 

Chat GPT can provide personalised recommendations for traders based on their individual trading style and preferences. Traders can ask the chatbot questions about specific trading scenarios, and it can provide recommendations on forex trading strategies, risk management techniques, and other factors that can impact their trading success. 

And the best part? ChatGPT can work 24/7, providing traders with up-to-date insights and analysis at any time of the day or night. 


Now, I know what you are thinking. "This all sounds too good to be true. What is the catch?" Well, my friends, there is one catch. ChatGPT is not infallible. While it can analyse vast amounts of data and provide insights, it is not immune to the unpredictability of the market. Traders still need to exercise caution and make their own judgments based on ChatGPT's analysis. So, lets take a look of what are the drawbacks of using this AI for trading. 


The Pitfalls of Trading with ChatGPT: 

  • Limited Understanding of Market Conditions 

While ChatGPT is highly proficient in language processing, it lacks the capacity to understand the nuances of market conditions. The market is highly complex, and there are numerous variables that can impact it. ChatGPT may analyse historical data and provide trading signals based on that analysis, but it may not be able to take into account current events that are influencing the market. This can result in incorrect trading signals and ultimately lead to financial losses.