Can Chat GPT Perform Valid Technical, Fundamental or Wave Analysis?

If you’re a trader, then you know that analyzing the stock market is essential to your success. After all, if you don’t know which stocks are worth investing in, then you could end up losing a lot of money. Fortunately, there’s a tool that can help you with this task: chat GPT.

Chat GPT is a chatbot that uses artificial intelligence to analyze the stock market and give you advice on which stocks to buy and sell. In this blog post, we’ll show you how chat GPT works and how it can help you make better decisions when trading stocks.

An important caveat is that Chat GPT does not have access to live data, and therefore, despite being able to interpret the rules and apply them to a dataset, i.e. ask the AI to tell you which wave the GBP/USD is in the right now, when making a decision to enter a trade. Without live data (for now) the task is fun and promising but also futile.

How Chat GPT Works

We cover this more in-depth in our test of Chat GPT in analyzing a Tesla stock, but in short, Chat GPT uses artificial intelligence to analyze the stock market and give you advice on which stocks to buy and sell. 

The chatbot does this by looking at a variety of factors, such as the current price of a stock, its historical price, news articles about the company, and analyst ratings. Based on this information, Chat GPT will give you a buy, hold, or sell rating for each stock.

I have been fascinated by the @HindenburgRes $IEP situation, and there are some interesting learnings here. For example, one learns from $IEP that a controlling shareholder of a company with a small float that pays a large dividend can cause his company to trade at a large…

— Bill Ackman (@BillAckman) May 24, 2023

To do this, simply tell the chatbot how much money you want to invest and what your risk tolerance is. The chatbot will then create a portfolio of stocks that meets your criteria.

How Chat GPT Can Help You Analyze the Stock Market

By using Chat GPT to analyze the stock market, you can get an objective opinion on which stocks are worth investing in.

The chatbot takes into account a variety of factors that humans often overlook, such as analyst ratings and news articles about the company. 

As a result, Chat GPT can help you make better decisions when trading stocks.

We can ask simple things like:

What is the current support and resistance level on uber stock based on wave analysis theory?

Chat GPT Reply:

According to wave analysis theory, the current support level for Uber stock is $50.00 and the resistance level is $60.00. These levels were determined by examining the historical price action of Uber’s stock over a specified period of time, looking for trends and patterns in order to predict future performance. Knowing these support and resistance levels can help traders make informed decisions about when to buy or sell Uber stock.

*Reply Based on data up to 2021

What is the Risk Specific to Chat GPT When Analyzing Stock Market?

One of the risks associated with chat GPT when analyzing the stock market is the potential for inaccurate or incomplete data.

While the chatbot can analyze a variety of factors, there is always the risk that some critical piece of information is missing or incorrect. This could lead to inaccurate predictions and poor trading decisions.

Another risk specific to Chat GPT when analyzing the stock market is the potential for bias. 

Artificial intelligence algorithms are only as accurate as the data they are trained on, and there is always a chance that these algorithms could be biased due to factors such as gender, race, or other demographics. This could lead to inaccurate predictions and poor trading decisions.

Will Chat GPT Analyze Forex?

Chat GPT is not designed to analyze “forex” in general. However, it can still be used to analyze individual currency pairs like EUR/USD by looking at the underlying factors that affect its price movements. For example, Chat GPT could look at the news coming out of Europe and the United States, as well as economic data from both regions.

If you’re looking for a tool that can help you analyze the stock market, then consider using Chat GPT. The chatbot uses artificial intelligence to take into account a variety of factors that humans often overlook, such as analyst ratings and news articles about the company. As a result, Chat GPT can help you make better decisions when trading stocks.

Chat GPT is not designed to analyze the EUR/USD trading pair specifically. However, it can still be used to analyze this currency pair by looking at the underlying factors that affect its price movements. For example, Chat GPT could look at the news coming out of Europe and the United States, as well as economic data from both regions

Wave Analysis and Chat GPT

Chat gpt can indeed perform wave analysis on a currency pair such as the EUR/USD. This allows traders to identify the most likely patterns and trends in the market, which can then be used to make more informed trading decisions.

Wave analysis is based on Elliott Wave Theory, which states that markets move in waves of five impulse waves followed by three corrective waves. The five impulse waves are identified as wave 1, 3, 5; and the three corrective waves as A, B, C. Using these wave structures, traders can analyze price movements and identify what direction the market is likely to go in next.

In order to use wave analysis with chat gpt effectively, traders need to understand how to read wave patterns correctly and interpret them accurately. With chat gpt tools specifically designed for wave analysis, users can easily access real-time data that is necessary for making accurate predictions. 

Historical data can also be accessed from within the program so that users are able to review past performance and look for similar patterns that may occur in the future.

The ability to interpret Elliott Wave Theory accurately is essential for any successful trader using chat gpt for their wave analysis needs. 

By understanding how each of the five impulse waves and three corrective waves interact with one another over time, traders are better equipped to make more informed trading decisions based on their wave analysis results. 

As a result, traders who understand how wave structure works will be able to maximize their profits while also minimizing their risks when trading with chat gpt tools.

For instance, you can ask:

“Which wave based on wave analysis is eur/usd is in right now?”

Chat GPT Reply:

“Right now, the EUR/USD currency pair is in the fifth wave of the Elliott Wave Theory. This wave is known as the impulse wave and is often seen as signifying a trend reversal. It is important to note that this wave can last anywhere from one to several weeks, so it’s important for traders to be able to.”

*Reply Based on data up to 2021

Going more precise, we can also ask:

“What is the current support and resistance level for eur/usd based on wave analysis theory?”

Chat GPT Reply:

Based on wave analysis, the current support and resistance levels for the EUR/USD currency pair are 1.1708 and 1.1862 respectively. This can change over time depending on market conditions so it is important.

Chat GPT can be used with the popular trading platform MetaTrader 4/5 (MT4/5) to help traders analyze and make more informed decisions. The chatbot uses artificial intelligence to take into account a variety of factors that humans often overlook, such as analyst ratings and news articles about the company. This allows users to quickly keep track of these levels in order to make informed trading decisions.

*Reply Based on data up to 2021

Key takeaways

While you can totally use Chat GPT to analyze financial markets, you still need to be skillful in the “art of talking to AI”, as well as have a basic understanding about the method you ask the

Take everything that Chat GPT spits back at you with a grain of salt and you will be alright, in the meantime, keep an eye on all things AI (pun intended) as this sector is hitting a new gear, and financial trading and fintech is no slouch when it comes to new tools.

Play around asking Chat GPT questions about your trading decision to see if it can provide value, feel free to reach out if you’ve got any questions related to Chat GPT or Algo trading.

Safe Trading
Team of Elite CurrenSea 🇺🇦❤️