Here is a dialogue:
FBS analyst: Hi, chat! Please give an example of a trading strategy combining the 200-period MA and the RSI.
ChatGPT: Certainly, here's an example of a trading strategy that combines the 200-period moving average (MA) and the Relative Strength Index (RSI):
Identify the trend using the 200-period MA. The trend is bullish if the price is above the 200-period MA. The trend is considered bearish if the price is below the 200-period MA.
Use the RSI to confirm overbought or oversold conditions. An RSI reading above 70 indicates an overbought condition, while an RSI reading below 30 indicates an oversold condition.
Look for a bullish signal when the trend is bullish, and the RSI is oversold. A bullish signal is generated when the price crosses the 200-period MA and the RSI is below 30, indicating a potential trend reversal.
Look for a bearish signal when the trend is bearish, and the RSI is overbought. A bearish signal is generated when the price crosses below the 200-period MA and the RSI is above 70, indicating a potential trend reversal.
Use stop-loss orders to limit losses if the trade goes against you.
Use profit targets to take profits when the trade goes in your favor.
FBS analyst: Where should I put my stop loss using this strategy?
ChatGPT: The placement of your stop loss using this strategy will depend on your risk tolerance, market volatility, and trading goals. Generally, a stop loss is placed below the recent swing low in a bullish trade and above the recent swing high in a bearish trade. This helps limit losses if the market moves against your position.
In the case of this strategy, if you are going long after a bullish signal is generated, you can place a stop loss below the recent swing low or below the 200-period MA, whichever is lower. If you go short after a bearish signal is generated, you can place a stop loss above the recent swing high or above the 200-period MA, whichever is higher.
Isn't it amazing?
After 30 seconds, ChatGPT provided a trading strategy with your favorite indicators and suggested the best place for stop loss orders. You can add another two or three indicators, risk-reward ratio, and other data to make the AI create a more detailed answer.
2. Create a trading bot
After creating and back-testing the trading strategy, we want to automate it and create our first trading bot. You can create trading bots for MT5 using the MQL5 language. Describe your strategy as clearly as possible and pick the programming language. In our example, we will use the strategy from the previous paragraph.
After ChatGPT built a code for our bot, testing it before using it on a real account is essential. However, isn’t it a great tool to dive into the EA niche without programming knowledge?
3. Ask anything
We suggest you treat ChatGPT as an experienced friend with most of the world’s knowledge about trading. Asking questions to ChatGPT will save you time and allow you to get detailed answers in the shortest possible time, increasing the speed and level of your learning.