Transforming Trading Indicators with AI

Feb 3, 2025

Converting Indicators into Strategies Using AI

Introduction

  • Importance of converting indicators into strategies for better trading results.
  • Previous content discussed top indicators; this video focuses on the conversion process.
  • Michael aims to help viewers understand how to create strategies from indicators using AI.

Objective

  • Show how to convert indicators into strategies using Open AI (specifically ChatGPT).
  • Emphasis on the method's effectiveness and potential success for users.

Key Points

  • Choice of AI:
    • Use ChatGPT 01 Preview for best results.
  • Common Issues:
    • Some common problems may arise, but they can be solved in real-time during the tutorial.

Indicators to Convert

  1. Bull Market Support Band

    • Indicator overview: Buy signals on upward crosses and sell signals on downward crosses.
    • Steps for conversion:
      1. Add the indicator to the chart.
      2. Copy the indicator's source code.
      3. Use a predefined prompt in ChatGPT to convert it into a strategy.
    • Results:
      • Initial returns: 383% profit (compared to original 736%).
      • Adjustments made to improve results.
  2. Bollinger Bands

    • Indicator overview: Buy when the price is above the upper band; sell when it breaches the lower band.
    • Steps for conversion:
      1. Add the indicator to the chart.
      2. Copy the source code, then use the prompt in ChatGPT.
    • Results:
      • Adjustments required to specify buy/sell conditions.
      • Final results showed significant profits after adjustments (1,187% profit).
  3. Super Trend

    • Indicator overview: Buy on green signals, sell on red signals.
    • Steps for conversion:
      1. Add indicator to the chart.
      2. Copy source code and use in ChatGPT.
    • Results:
      • Initial conversion had errors; corrected buy/sell signal logic.
      • Final results matched original strategy profits.

Lessons Learned

  • Effective use of AI can simplify the strategy creation process.
  • Importance of clearly defining buy/sell conditions for indicators.
  • Flexibility in adjustments post-initial conversion is crucial for accuracy.

Conclusion

  • The process of converting indicators into strategies is simplified using AI.
  • Encouragement for viewers to try creating strategies independently.
  • Mention of future content on combining multiple indicators into a single strategy (conditional on likes).
  • Reference to Signum Dooney for automating trading strategies created.