Can Chat GPT Change Forex Trading?

Contentworks Agency
4 min readApr 17, 2023

Welcome to another week of trading! Today, we’re digging into ChatGPT and how it could impact forex trading. After that, we’ll list the top fundamental events that you can trade this week. Let’s go!

Wait…GPT?

Just in case you’ve missed out on the craze of 2023 so far — ChatGPT is a chatbot developed by OpenAI. It’s what’s known as a large language model and has been fed a massive amount of text and code in order to respond to specific input from users.

It can be used to generate text, translate languages, write copy, and answer questions, sometimes in ways that you wouldn’t expect.

ChatGPT has catapulted AI and its many plusses and minuses into the limelight. But could it impact the Forex markets?

The good

The prevalence of automation in FX is actually nothing new. Algorithmic traders have been using programs to execute trades on their behalf for years. These programs are designed to follow a set of rules and to make decisions based on a variety of factors, like price movements, market sentiment, and technical indicators.

But ChatGPT is a little different as it doesn’t need to be so specifically programmed. In theory, it’s already learned what to do and what not to do. So, what benefits could it bring to trading?

#1 Easier analysis of market data

ChatGPT can be used to analyse historical prices, and technical indicators, as well as dig up news sentiment more easily, cutting out the wheat from the chaff.

Armed with this information, traders are able to make more informed decisions without needing to spend so much time on research.

#2 A cheap trading advisor

Going one step further than the above, ChatGPT can be used to provide actual trading advice. This is given based on the model’s understanding of the market and its ability to predict future price movements.

Employing the tool for such a purpose has the potential to massively reduce the barrier to entry for a lot of potential traders. However, it sets a dangerous precedent as over-reliance could cause massive issues. We’ll get to that in a minute.

#3 Automated trading

ChatGPT can also be used to automate trading. This means that trades can be executed automatically, without the need for human intervention. This can save traders time and effort and can help them to take advantage of market opportunities more quickly.

The bad and the ugly?

Well, like almost everything in life (and trading), there are two sides to the coin. Some of the key issues with Chat GPT and trading include the following.

#1 Over-reliance

ChatGPT is still under development, and its accuracy may be far less than perfect. Traders should be wary of this and always rely on their own judgment when making investment decisions.

Blindly trusting the word of any algorithm, ChatGPT or otherwise, is a big no at this stage.

#2 A homogenous market

Put simply, if AI starts making everyone’s trading decisions for them, wouldn’t all trades ultimately end up being the same?

Trading is an industry that relies on speculation, diversity and differences of opinion. Over-reliance on ChatGPT could totally erode such characteristics and drastically alter the market as we know it.

#3 Potential market manipulation

This is a bit of a stretch at this point, but bear with us.

If point 2 is possible, then it’s entirely conceivable that an individual or group could hack a popular AI service like ChatGPT and begin to manipulate the AI into telling traders to behave a certain way, e.g. buying a certain pair at a certain time, etc.

If done correctly, the gains (and losses) made through this exploitation could be massive. Remember the Skynet robots in T2? Well it’s that but forex trading!

Your thoughts?

What do you think about ChatGPT and FX? Do the benefits outweigh the potential pitfalls? Just how far with AI penetrate the world of trading? Let us know by tweeting us at @_contentworks!

Top fundamental events week commencing 17.04.23

Here are all of the main events coming up in what looks like a pretty busy week for the markets.

Monday April 17

● JPY — All Industry Activity Index (February)

● GBP — Nationwide House Price Index (March)

Tuesday April 18

● CAD — Retail Sales (February)

● USD — ISM Manufacturing Index (March)

Wednesday April 19

● USD — Construction Spending (February); Factory Orders (February)

Thursday April 20

● USD — ADP Non-Farm Employment Change (March); Initial Jobless Claims (week ending April 16)

Friday April 21

● USD — Non-Farm Payrolls (March); Unemployment Rate (March); Average Hourly Earnings (March); Consumer Price Index (CPI) (March); Core Consumer Price Index (CPI) (March)

Here at Contentworks we closely follow market movements and prep content that we think your traders would love to read. Let’s get you started right here.

Speak soon!

The Contentworks team

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Contentworks Agency

Contentworks Agency provides compliance friendly content to banks, forex brokers, fintechs and many other sectors.