What's up, everyone? All right? So we're gonna see if we can use Chat GPT to develop a trading strategy. So let's start here by asking some basic questions about day trading and see what Chat GPT knows. So explain day trading to me like I'm five years old. Day trading is when you buy something like a toy or candy in the morning and then sell it later in the day for more money than you paid for it.

Brilliant. It's like when you trade your toy car with a friend for his toy airplane. sort of. but instead of playing with it, you sell it back to the store for more toys.

Not really day. Traders Do this with things like stocks or cryptocurrency instead of toys. But just like when you trade toys with your friends, it's important to know when to sell so you can make a profit. That doesn't seem like a great answer.

Let's try to up it a little bit. explain day trading to me like I'm 38 years old. Let's see if we get a more real answer. Okay, day trading is a type of investment strategy where traders buy and sell Financial assets.

Okay, okay, so to be a successful day trader you have to have a solid understanding of Market fundamentals and technical analysis as well as a discipline approach to risk management and capital allocation. Okay, this all seems this is like a good kind of Wikipedia you know Google search of what is day trading? Let's see if we can ask it a hard-hitting question. How do I tell my parents I'm a day trader telling your parents that your day trader can be challenging, especially if they're not familiar with the concept. Here's some tips to help you have an open and honest conversation with them, explain what it is, show your commitment, be honest about the risks, share your goals, listen to their concerns.

You know to be honest, this isn't that bad. Okay So we've gotten through the hard things telling our parents and knowing the basics about day trading. so now why don't we see if maybe Chat GPT can help us come up with a strategy. So what is a good day trading strategy? There are many day trading strategies and the best one for you will depend on your style, risk tolerance, and market conditions.

Here are a few strategies that are commonly used by successful Day: Traders Okay, so scalping involves making lots of small trades throughout the day: Momentum Trading which is also usually scalping. Or you usually if you're scalping, you're looking for Momentum Breakout trading which is buying for breakouts. That's also kind of Momentum and Scalp trading. News trading.

That's Momentum Trading and swing trading. Buying and holding overnight. Okay, all right, so Chat GPT has given us five different possible day trading strategies. Let's see if I ask it about.

Well, let's see. Um, so I asked it the best. It seems to think scalping is number one. I mean in no particular order? but it doesn't say in no particular order.

So is this ordered based on which one is best? Well, I would say swing trading is the least interesting to me. News trading is difficult in terms of actual breaking news. so I'd say this might be pretty close. Okay, so um, how do I Um, how do I scalp trade? Let's see if that's too.

General Okay, so it's giving me this Very okay. Well, no this is helpful. All right. So let's start taking some notes.

Here All right. so we're gonna start taking some notes. We know we want a strategy that gives us a daily goal of 15 cents a day with a thousand shares. That's 150 per day.

All right, that's a high level strategy. so we've got to start figuring out what can we do here. So Chatgpt says: choose a highly liquid Market to scalp trade Effectively, you need to choose a highly liquid Market that has a tight bid, ask spread, and high trading volumes. See now.

I Don't think that that's correct because if you're just trying to scalp one penny, you know back and forth. I I Don't think that that's going to be enough profit to justify the risk of catching a flush. So as a seasoned Trader I I agree that you want High liquidity. but I don't know that you want a one cent spread.

So I think there's a little bit of a confusion there, but we can forgive Chat. GTP So let's see, use a short-term chart. That's true. Okay, so now we know we want to be using a one minute chart Okay one minute chart to in to identify short-term price movements, identify key levels, identify key support or resistance levels.

Using technical analysis, these levels can help you identify potential entry and exit points. Okay, that's great in theory, but you know how do I actually do it? Use a trading plan? Develop a trading plan that includes entry, exit, stop loss. So to be honest I should say can you write me a day trading plan for scalp Trading Sure. Here's an example of a day trading plan for scalp Trading Okay, so it's kind of doing this okay.

marketing time frame: She's a highly liquid Market such as the S P 500 or NASDAQ In a short-term time frame such as a five minute chart. Entry and exit rules. it's using the same general stuff: Use a two to one risk, one to two risk to reward ratio two to one profit to loss ratio Position sizing. Use proper position sizing.

Okay, Risk management. Use proper risk management. Trading hours determine the best time to trade. Okay, so this is definitely a template kind of.

It's good stuff. Keep a trading journal, but it doesn't have the meat so it's like it's a skeleton of what you need, which is helpful. You know everyone needs a good skeleton, but you also need something to put on the skeleton Like you know the meat and stuff. Uh, so this doesn't have a lot of meat to it.

All right? Um, how do I find or what's a good Let's see if we could do this. What's a good Momentum Stock today? Um, okay, so they don't have real-time Market Data Okay, all right. Okay, so let's see to identify potential Momentum stocks. you can look for stocks that have shown strong movements in price.

RSI Yeah, all right. Well, we know that. Um, so let's see. Um, all right.

and they're recommending a couple of these free scans, but they don't. Always. Um, they're not always good for intraday stuff. That's more for swing trading.

daily. Watchless. Okay, so well. what we certainly know here is we want to use a one minute chart.

We want to look for liquidity. Um, and I think we understand. Well, I don't know if we do understand about looking for something that's moving quickly. Uh, that's that's more on the momentum trading side of things.

Okay, well let's see. what about. can you design a Momentum Day trading plan for me? Oops, there we go. Okay, so it's giving me almost the same exact answer as the Scalp trading plan.

So um, hmm, that's that's tough so we'll stop generating that. How do I tell my boss I Want to quit and start day trading potential risks? So okay, so now it's giving us a little bit of advice here. It's saying hey, remember day trading can be challenging. Don't be too stupid here.

You know success isn't guaranteed, so you probably shouldn't quit because that was a stupid question that you just asked. But if you're thinking about it, you're stupid. But also, you know, be professional, give notice, Make sure you could probably get that job back because you're probably going to need it back because you're probably going to lose money. And um, yeah, that's about it.

Okay, so that was a positive answer. Let's see. Um, how do I know if a stock has momentum? Okay, so relative strength. They're recommending some indicators above 70 overbought below 30 oversold.

So just defining moving averages here. Uh, okay, you know this is it. It's I mean Google should be scared because this is a better Google in a lot of ways I mean it's giving you answers which the I'd say if I was going to compare Google The nice thing with Google is that you can really vet a lot of different potential search results and different answers and this is just kind of giving you one which you know May produce inaccurate information right? It may not be. um, it may not be accurate, but that's that's the risk.

Um, that's the risk about it So well. I Think that if we were going to ask chat GPT to design a strategy, it's not gonna be able to do that. It's just going to give us high level things which is interesting and helpful, but there's just not a lot of detail there. Um, you know what's a bull flag for day trading? A bull flag is a common chart pattern used by technical Analysis Day Traders So you know what are the most popular chart patterns for day? Traders Let's ask it this way.

so Traders often look at a breakout pattern from the bull flag is a potential trading opportunity. Yup, Traders may enter a long position when the breakout occurs. What are the most popular chart patterns? Bullish and bearish flags Head and Shoulders Yep, Double top and double bottom? Yep. Cup and handle.

Yep, that's a good one. Wedge pattern: Okay, um so you know I mean certainly if you were focusing on you want to focus on scalp and momentum trading and you wanted to dial more into these patterns, it just is all really good. Like kind of top of the just sort of scratching the surface foreign word article about how to start day trading. Okay, this is like it just like took a deep breath.

It's like really okay here we go. so understanding the risks and rewards of day trading. My guess is that you know it's just it's so General it's it's super general which is helpful if you're Googling how to start day trading. but you know if you're If you've done more than Googling and you want to start really getting into it, then that's when you're going to kind of come up short here.

so there's a little bit. Seems like there's a little bit of a limit to to what this can do right now. Do you think that this could design a strategy that would make seven hundred, fifty thousand dollars in three days? Because there was someone on YouTube that was asking about that. He seemed like he maybe owed somebody some money.

Um, and well, why don't we ask it? Can you design a trading strategy? Oops, that can make me 750 000. And let's just clarify USD in three to four days? Nope. So it's giving, it's giving a good answer that it's very unlikely that that would be possible. Okay, so yeah, so that's bad news for the fellow that made that comment on YouTube But but it is.

Um, it is good. And and this is true, it's not recommended to pursue day trading with the sole goal of making a large profit within a short period of time. That's that is 100. True Rather go slow long-term strategy focus on risk management is day trading a marathon or a Sprint Oh, day trading is often like into a marathon rather than a Sprint Um, you know I'm starting to really like this chat.

GPT Stuff I Feel like it kind of knows what it's talking about is Ross Cameron from Warrior trading. Pretty handsome. Now let's just get real here for a second. Come on, come on, that's not an answer.

It's important to focus on individuals knowledge and expertise and track record when evaluating their abilities as a Trader or an educator. Well, they're not wrong about that part. and I do have quite a track record. So 583 dollars to 10 million 1 million in three years and then 10 million in about five years.

Of course you guys can check that out over at the bottom of the website. Uh, this is an interview I just did with Max one million dollar badge holder So well I guess at this point I Think we probably know what we need to know about chat GPT it doesn't seem to be able to recognize. you know Beauty when it sees it does a lot of surface level chit chat. Um, but you know how do I tell my wife I Lost money trading GameStop Remember yeah it can be says it can be a hard conversation.

no they're not wrong about that. It's true. that can be a hard conversation explain what happened. mm-hmm yeah I know this is this is all good stuff.

um I Yeah you know it may be worth checking out but it can't help. tell me what stocks I should look at today because it doesn't have the data of you know Market data. so is it going to be the next? Google Is it going to take over Google I Don't know. These are pretty good answers.

it just might hope. You guys enjoyed this short episode. Make sure you tune in for another one real soon and I'll see you guys for the next episode.