Bitcoin

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 <p class="paragraph">ChatGPT, an artificial intelligence (AI) language model developed by OpenAI, has released a new tool designed to simplify the process of backtesting trading strategies.&nbsp;</p>
 <p class="paragraph">In a thread published on their <em>X</em> (formerly <em>Twitter</em>) account, on March 27, Pedma, a library of trading strategies, outlined a 6-step process. They utilized ChatGPT to backtest a simple moving average (MA) crossover strategy for Bitcoin (BTC) rather than a ChatGPT trading bot.</p>
 <p class="paragraph">Here’s a breakdown of the key components:</p>
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 <h2 class="wp-block-heading" id="h-chatgpt-python-nbsp">ChatGPT Python&nbsp;</h2>
 <p class="paragraph">In the first step, the user requests ChatGPT to provide Python code for importing the required libraries for backtesting a trading strategy, with a focus on data handling from Yahoo Finance and visualization.&nbsp;</p>
 <p class="paragraph">By providing the necessary tools right away, ChatGPT saves time and makes it easier for traders to turn their ideas into reality.</p>
 <h2 class="wp-block-heading" id="h-data-retrieval-from-yahoo-finance">Data retrieval from Yahoo Finance</h2>
 <p class="paragraph">After setting up the initial libraries, Pedma asked ChatGPT how to get data. They wanted to know how to get historical Bitcoin price data (daily OHLC and volume) in Python, starting from January 1, 2020.&nbsp;</p>
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    <p lang="en" dir="ltr">2. Data Retrieval from Yahoo Finance<br><br>Now we need data for our backtest.<br><br>Let's use Yahoo Finance data for this.<br><br>Prompt → "How can I use Python to retrieve Bitcoin (BTC-USD) historical price data (daily OHLC and volume) from Yahoo Finance, starting from January 1, 2020?" pic.twitter.com/ZWrsN6DYmg</p>— pedma (@pedma7) March 27, 2024
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 <p class="paragraph">With ChatGPT’s help, users can easily get important info like daily prices and <a rel="noopener noreferrer nofollow" title="trading" href="https://thebittimes.com/tag/trading.html">trading</a> volume.&nbsp;</p>
 <p class="paragraph">This means traders can focus on understanding market trends and improving their strategies without wasting time looking for data themselves.</p>
 <h2 class="wp-block-heading" id="h-chatgpt-trading-strategy">ChatGPT trading strategy</h2>
 <p class="paragraph">In the third step of the process, Pedma asked ChatGPT to help define a trading strategy using the available Bitcoin data. Specifically, they requested guidance on creating a MA crossover strategy in Python using the ‘pandas tool.’&nbsp;</p>
 <p class="paragraph">By offering clear guidance on strategy definition, ChatGPT enables traders to develop structured approaches to market <a rel="noopener noreferrer nofollow" title="Category Analysis" href="https://thebittimes.com/analysis.html">Analysis</a>, which can help them make smarter decisions when dealing with the market.</p>
 <h2 class="wp-block-heading" id="h-implement-the-backtest">Implement the backtest</h2>
 <p class="paragraph">Once the strategy was defined, Pedma inquired about implementing the <a rel="noopener noreferrer nofollow" title="backtest" href="https://thebittimes.com/tag/backtest.html">backtest</a> using Python and pandas to assess the strategy’s performance.&nbsp;</p>
 <p class="paragraph">They asked ChatGPT how to execute this step to analyze how well the strategy would perform in real market conditions.&nbsp;</p>
 <p class="paragraph">This step helped Pedma understand the effectiveness of their trading idea and its potential to succeed in the market.</p>
 <h2 class="wp-block-heading" id="h-analyze-the-results-and-visualize">Analyze the results and visualize</h2>
 <p class="paragraph">After completing the backtest, Pedma wanted to see the results and make a graph to show the returns. They asked ChatGPT how to do this using pandas and matplotlib.</p>
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   <blockquote class="twitter-tweet" data-width="500" data-dnt="true">
    <p lang="en" dir="ltr">5. Analyze the Results and Visualize<br><br>We also want to see the returns on a plot.<br><br>Prompt → "Finally, how can I use pandas and matplotlib to analyze the <a rel="noopener noreferrer nofollow" title="backtest" href="https://thebittimes.com/tag/backtest.html">backtest</a>'s key performance metrics and visualize the equity curve for the SMA crossover strategy on Bitcoin data?" pic.twitter.com/Zp0Y5AkKoL</p>— pedma (@pedma7) March 27, 2024
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 <p class="paragraph">Their goal was to understand the important numbers from the <a rel="noopener noreferrer nofollow" title="backtest" href="https://thebittimes.com/tag/backtest.html">backtest</a> and visualize the equity curve to show how the strategy worked with Bitcoin data.</p>
 <h2 class="wp-block-heading" id="h-python-code-knowledge-will-help">Python code knowledge will help</h2>
 <p class="paragraph">In the final step, Pedma noticed a problem with the drawdown chart — it wasn’t showing the right data. So, they had to manually fix it to make sure it displayed the correct information.&nbsp;</p>
 <p class="paragraph">While ChatGPT automates much of the process, basic Python knowledge is still recommended.&nbsp;</p>
 <p class="paragraph">More complex strategies might require manual code adjustments, especially for accurate visualization.</p>
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/chatgpt-now-helps-you-backtest-simple-trading-strategies-tbt83799.html">https://thebittimes.com/chatgpt-now-helps-you-backtest-simple-trading-strategies-tbt83799.html</a></p>

ChatGPT now helps you backtest simple trading strategies

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TheBitTimes

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