I Gave an Ai Bot $50,000 to Trade Stocks
People & Blogs
Introduction
In recent years, AI bots have shown remarkable proficiency in various competitive fields, including chess, poker, and video games. Inspired by these advancements, I wanted to take on an audacious challenge: creating an artificial intelligence robot that day trades in the stock market. Following the approval of a budget of $ 50,000, the stage was set for a riveting showdown between technology and human trading prowess.
The Plan
With the bot's creation in mind, I came across ChatGPT, an AI assistant capable of performing a variety of tasks, including coding. Realizing that coding an AI trading bot was well beyond my expertise, I decided to leverage ChatGPT's capabilities to devise a trading strategy. The initial steps involved determining which stocks the bot should focus on, establishing risk limits, and selecting indicators for trading decisions.
After engaging in a series of prompts, I arrived at a solid day trading strategy and handed it over to a developer to put it into code. This bot would operate in a live environment on Robinhood, utilizing a predetermined trading strategy primarily based on the RSI (Relative Strength Index) indicator.
Enter the Competition
To gauge the AI's performance, I also wanted to pit it against real human traders, specifically social media trading gurus. Outlining a few candidates, I first joined a trading signal service that promised high returns but soon discovered they failed to provide timely signals.
After some trial and error, I found a more dynamic group, led by Gary Vaynerchuk, claiming to have a massive following. I joined this group, as well as another run by a trader named Kevin. We would follow their trades on paper accounts while my AI bot utilized real money.
The Trading Begins
As the live trading day opened, I initiated the bot, which began scanning for trading opportunities. It successfully executed multiple trades, with the bot managing to end the first day with just a minor loss.
Over the following days, I continued to monitor both the bot trades and the signals from the human traders. While the bot showed promise, it performed variably depending on market conditions.
After a week of trading, the results were in:
- AI Bot Results: The bot ended with a balance of $ 50,441, demonstrating an appreciation in value.
- Human Trader Performance: Following the signals from the guru traders, the paper account ended at approximately $ 48,899.
- SP500 Benchmark: Had the funds simply been invested in the S&P 500 ETF, the balance would have been $ 48,950.
Conclusion
While the results were not conclusive, they shed light on the burgeoning opportunity AI holds in the trading realm. The performance of the AI bot outpaced the human traders, ultimately leading me to consider the potential of AI in the day trading landscape.
This endeavor opens the door to further investigation and exploration in the field of AI-driven trading, which goes far beyond mere speculation.
Keywords
AI, trading bot, stock market, day trading, ChatGPT, RSI, human traders, signal service, Gary Vaynerchuk, trading strategy, performance, investment, S&P 500.
FAQ
Q: What is the purpose of giving an AI bot $ 50,000 to trade stocks?
A: The goal was to evaluate the AI bot's capability to day trade effectively and compare its performance against several social media trading gurus.
Q: How was the trading strategy developed?
A: The trading strategy was developed using ChatGPT, which provided insights on stocks to trade, risk management, and technical indicators like the RSI.
Q: Who were the competitors to the AI bot?
A: The competitors included trading signal services associated with popular figures like Gary Vaynerchuk and a trader named Kevin.
Q: What were the results after a week of trading?
A: The AI bot concluded with $ 50,441, outperforming the human traders, whose paper trading account ended at $ 48,899.
Q: Is the trading performance of the AI bot conclusive for future investments?
A: While the initial results are promising, further testing is necessary to draw definitive conclusions about AI's effectiveness in trading across various market conditions.
