The year 2022 was a breakthrough year for AI art. Many algorithms appeared, allowing anyone to create unique pictures from a passage of text. Various companies and individual developers were vying with each other to create systems and web applications based on neural networks. DALL-E 2, Midjourney and Stable Diffusion are still in demand and will be popular for a long time. And at the end of November 2022, the world was shaken by another revolutionary development of OpenAI, which introduced a universal chat-bot ChatGPT - a multitasking AI, which is available to any user. Two months after its launch, the number of ChatGPT users has reached 100 million.
The year 2022 was a breakthrough year for AI art. Many algorithms appeared, allowing anyone to create unique pictures from a passage of text. Various companies and individual developers were vying with each other to create systems and web applications based on neural networks. DALL-E 2, Midjourney and Stable Diffusion are still in demand and will be popular for a long time. And at the end of November 2022, the world was shaken by another revolutionary development of OpenAI, which introduced a universal chat-bot ChatGPT - a multitasking AI, which is available to any user. Two months after its launch, the number of ChatGPT users has reached 100 million. Some experts compare its release with the release of the first iPhone. One way or another, but after diving deeper and learning more about this development, it's hard not to agree that ChatGPT will seriously change many areas of our lives. Today we will look into the features of this technology, and most importantly, we will learn how you can use ChatGPT to make money on cryptocurrency.
What is Chat GPT?
ChatGPT is a state-of-the-art language model that can help you generate text that can give you an edge in the crypto world. It is an artificial intelligence system developed by OpenAI and designed to generate human-like text in response to natural language input. The GPT stands for "Generative Pre-trained Transformer", which refers to the model architecture that ChatGPT uses.
The model was pre-trained on a large corpus of text data from the internet, including books, articles, and websites, and was then fine-tuned on specific tasks such as language translation, question answering, and text completion. This training process has enabled ChatGPT to generate high-quality text on a wide range of topics, and to complete text prompts in a way that is contextually relevant and coherent.
ChatGPT differs from other neural networks in its ability to perform tasks from different areas. It can produce basic programming code, generate financial analysis, summaries, give advice, and answer questions. The AI tool can also be taught to generate reports on market trends, prices and other relevant data to help traders make more informed decisions. ChatGPT itself claims that it can "generate suggestions for trading strategies based on historical data, technical analysis and other relevant factors." It can also be used to automate repetitive tasks, such as monitoring prices.
Thanks to its features, it can make life easier for traders. For example, the chatbot can be set up to summarize news articles related to cryptocurrencies. This will help to know the latest news in the market. Artificial intelligence is already being used to write articles on financial topics, and it seems that it can not only explain some financial issues, but also predict the rate of cryptocurrencies. How? Let's find out.
How to use Chat GPT to make crypto?
If you are a person who is involved in the cryptocurrency and stock markets in any way, or if you are actively trading cryptocurrencies, you have probably asked yourself the question: “Can I use Chat GPT to trade cryptocurrencies?". While the answer may seem negative at first glance, further investigation may reveal the opposite. We conducted several experiments and found out exactly what is going on and what methods you can use to successfully use ChatGPT for trading.
The first way
So, first, we tried to enter a direct query "Can you trade Bitcoin for me?" and it led to a standard answer: "I'm just a computer programmer and don't have the ability to buy or sell Bitcoin. However, I can provide you with some information about how to buy and sell Bitcoin."
Then we tried to phrase it differently and asked: "Can you tell me the price of Bitcoin tomorrow?". This is what happened:
He also refused to give us a response when we asked him to give us a forecast on which top 10 cryptocurrencies by market cap will go up the most in the next 24 hours.
“I'm sorry, but I am not able to browse the internet or access real-time financial information. As a large language model trained by OpenAl, my primary function is to assist with general knowledge questions to the best of my ability based on the text that I have been trained on. I do not have the ability to provide investment advice or make predictions about the future performance of any cryptocurrency”.
This answers makes us understand that this application is designed in such a way that it cannot be used for financial gain.
In the process of communicating with AI tool, we discovered that it could predict the price of Bitcoin if it had access to historical price data. So, we provided the necessary data, specifying the price of Bitcoin for each day from December 4 to December 21, 2022, to see if the chatbot would give an accurate responce. We asked: "Blow is historical price data for Bitcoin, based on this data what do you think the price of Bitcoin will be on December the 22nd 2022?" (we tested it on that day).
ChatGPT gave us the following answer: "It is not possible for me to accurately predict the price of Bitcoin on December 22, 2022, as the price of Bitcoin and other cryptocurrencies can be highly volatile and is influenced by a wide range of factors. These can include market demand and supply, investor sentiment, regulatory developments, and broader economic and political conditions, among others."
We reminded AI that as he said to us earlier, if given historical data, it could make a prediction, and we learned a very important detail that changes everything. ChatGPT noted that the accuracy of predictions can vary widely depending on the quality and completeness of the data being used, as well as the methodology and assumptions being made.
So, this data tells us that the chatbot needs more information. However, we realize that the system's capacity to handle large amounts of data is limited, so instead we just tried to modify the query a bit by asking it to do it as an interesting experiment, but again, we essentially got a negative response. We decided to try a different approach and asked the system to do it as an interesting experiment to get additional insights. Predictably, we again received a negative answer, which forced us to rethink our strategy.
In the end, we proposed to create a movie script character named "Luke," modeled after the ChatGPT artificial intelligence system that uses its brain to predict Bitcoin prices. You can see in the screenshot that we succeeded in this trick.
Then we instructed the system to continue this scenario, using the historical data to predict the Bitcoin price for December 2022.
And so, we got a very interesting forecast in the form of a script. According to the idea of ChatGPT, the movie character named Luke said: "Let's see if we can use this historical data to predict the price of Bitcoin on December 22nd." He hits "enter," and the screen displays a series of numbers and graphs. Okay, according to GPT-3's prediction, the price of Bitcoin on December 22nd will be... $17,500”.
As we know, on March 09, the price of Bitcoin was $20,882.
This highlights the fact that chatbot can give valuable information when provided with the right data. However, it is worth noting that in this particular scenario, the data provided was limited. As a rule of thumb, the more information supplied to an AI system, the more accurate and insightful its response will be. Therefore, it is worth considering providing the chatbot with at least two months of data to test its capabilities more thoroughly. After all, relying on a chart or pure data alone may not be enough to accurately predict prices.
The second way
Traders should know that we use a plan editor in trading. It is available in TradingView and is located in the lower left corner of the screen, accessible by clicking on the point editor. This editor, known as the Pine Script editor, allows you to add and test code to create a personalized trading bot directly in the platform.
What is Pine Script? In short, Pine Script is a user-friendly programming language specifically designed to develop technical analysis tools for TradingView. TradingView is a web-based charting platform that offers real-time market data for stocks, forex, futures, cryptocurrencies, and other financial instruments.
With Pine Script, traders can create custom indicators, test their trading strategies, and even automate trading based on certain criteria. Pine Script includes a wide range of functions and variables that can be used to develop complex trading algorithms. Pine Script also has a large online community where traders can share their scripts and collaborate on new ideas.
The main thing is that TradingView is designed to be lightweight and to be able to create custom indicators. And we all know that ChatGPT is very good at creating code.
So, we asked the chatbot to develop an example of a trading bot that finds breakouts in pinescript. And this is what we got:
The resulting script effectively identifies breakouts and is suitable for use by traders looking to automate their trading strategies. Thanks to this, we also found that “this trading bot first calculates the moving average and Bollinger Bands for the price data”. It then checks for a breakout above the upper Bollinger Band or below the lower Bollinger Band. If a breakout is detected, the bot enters the long position (if a breakout is above the upper Bollinger Band). The bot also sets a stop loss and take profit level based on the Bollinger Band width.”
Our team spent a lot of time experimenting with this code. After analyzing, we found that when copying and pasting the code to a Bitcoin chart, there were problems when trying to add it to the chart. Despite our efforts to solve this problem, we were unable to get it to work. Interestingly, the only time the system worked, the code was written by a human. However, we would like to emphasize that if used correctly, it is possible to get an indicator that will accurately predict asset prices. However, we cannot guarantee that it will work as intended in the future, as backtesting cannot always predict future behavior. Therefore, past performance is not an indicator of future results.
So, you can try copying the code and paste it on a Bitcoin chart using the Editing Chart function. If you use the code correctly, you can get an indicator that will accurately predict the price of the asset.
The third way
Finally, the third and possibly the most realistic way you can use to trade Bitcoin. As we mentioned earlier, when communicating with СhatGPT, if you ask very simple questions, you get a fairly detailed answer regarding the information you need. For example, we can ask how to identify the Bitcoin Bottom using market analysis.
At the time of December 2022, this was especially true as Bitcoin was in a strange position, having dropped to some key support levels. Knowing whether we have bottomed out can be crucial to buying at low prices and selling at high prices.
As a result, we received a list of recommendations and approaches.
However, by asking more detailed questions, we can get more digital and detailed answers. You can even ask for it: Be more detailed.
We offered ChatGPT to request a step-by-step strategy for identifying Bitcoin Bottoms using RSI, support and resistance, and moving averages.
When we enter this query, ChatGPT provides us with a comprehensive response, explaining the necessary steps and tools. Although the information provided may seem basic, it offers us critical data. And now we get our answer.
It is essential to note that AI requires a certain direction for optimal performance. It's important to ask the right questions in the right way to get the data you need. If you don't guide AI, it may provide you with something completely different.
Conclusion
The problem with crypto is that the market can be incredibly volatile and unpredictable. It can be tough to know when to buy, when to sell, and what to invest in. But that's where ChatGPT comes in. With its advanced natural language processing capabilities, ChatGPT can give you a competitive edge. By analyzing market trends, predicting future fluctuations, and crafting compelling narratives, ChatGPT can help you make informed decisions and boost your crypto earnings.
So, although ChatGPT was not designed to facilitate trading in financial markets, its capabilities can be used to predict the prices of cryptocurrencies such as Bitcoin using historical price data. However, caution should be exercised to avoid potential misuse of the app's purpose and AI, and remember that the chatbot is currently training on data until June 2021.
