How ChatGPT Helps to Trade | Is AI Crypto Advice 100% Safe? – 🌐 Biswap News Portal

The modern world is wrapped up with innovations. Artificial intelligence technologies firmly integrate into different industries, getting more and more accessible. It means that not only big companies, governance, and organizations but every single person can experience the efficiency and utility of artificial intelligence, the crown of human creation.

Currently, ChatGPT is one of the popular methods not only for getting answers to daily questions but also a service that many traders use to improve their own experience and save resources for research.

In this article, we will describe the principles of how ChatGPT models work and will find how new developments in AI technologies, GPT-4, might help crypto traders. We will discuss how chat affects the crypto user experience, what type of information it can provide, and whether we can confidently rely on its replies.

📍This content has an informative goal and does not give any financial advice. Do your research and manage possible risks.

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What is ChatGPT?

ChatGPT is a chatbot built on top of OpenAI’s GPT-3.5 and GPT-4 large language models. The abbreviation GPT stands for Generative Pre-trained Transformer (GPT). In other words, this model uses deep learning to generate conversational text that imitates a human one.

Difference between GPT-4 and GPT-3.5 | New Version Advantages

On March 14, 2023, OpenAI (an American artificial intelligence research laboratory) launched a GPT-4, the newest version of their artificial intelligence model for natural language processing which is available to use via ChatGPT. This release has attracted users, the entire company’s attention, and crypto traders’ interest as well.

GPT-4 is ten times more advanced than GPT-3.5 and was developed with input from more than 50 experts. This enhancement enables the model to understand the context better and distinguish nuances, resulting in more accurate and coherent responses.

GPT-4 comparatively to GPT-3.5:

can process not only text but images and charts as well;
produce more factual responses;
more complex problem solving;
understand human language better.

At the Crossroads of Crypto & GPT models Innovation

Every day, the number of people familiar with crypto goes up, and a portion of those are engaged as well. Why not? It is new, profitable, and available for everyone. Widespread crypto activity is trading, which requires a lot of analysis, critical thinking, and research skills and might be very difficult, especially for newcomers.

At this moment, the GPT model comes into play. What if you ask an AI about trading tips? Is it possible to build a trading strategy based on GPT responses? This topic is open for debate. Look closer at the innovation and think if you can fully trust the ChatGPT advice.

Principle of GPT-4 Work

The key feature of GPT-4 is the ability to generate human-like language in terms of structure, grammar, syntax, and manner in different tones of voice. Thanks to the neural network trained on huge amounts of data stored on the internet, this model can respond with text and improve itself by identifying errors and adjusting its output. It means that over time, GPT-4 will become increasingly accurate and efficient at generating human-like language. The neural network consists of several layers, each of which processes information in a different way. The first layer processes raw input data, such as text or images (keep in mind that ChatGPT, as a product, can’t process images), and then passes it to the next layer for further processing. This process continues until the last layer, which generates the output text.

When you give a prompt (command/task description/imagine) to ChatGPT, the model generates a response by selecting the most likely following words based on the patterns it learned during pre-training.

What Trading Tips Can ChatGPT Provide?

Let’s get down to the ChatGPT implementation into trading. Here are the simplest examples of how you can use GPT-4.

Warning: GPT models generate responses based on previous training, information available at 2021 and data that you have provided. Therefore there is a chance to get the wrong answer. ChatGPT provides credible responses, but they are not absolute. Be careful and double-check the information.

Analyze charts
Analyze market updates
Make a coin or token deep research
Identify and manage risk
Sam up difficult articles

Of course, there is a range of more complex things ChatGPT can assist you with. The following options for ChatGPT use are not financial advice. You are free to experiment but remember that only you take responsibility for all consequences.

Automated Trading

Many traders use bots based on predefined rules to buy and sell crypto effectively. But these bots’ limitation is their inability to understand commands based on regular human language. ChatGPT crypto trading bot might be much more effective because it provides the feature to interpret news, blogs, posts in different social media, and other sources of information that could impact the price of coins or tokens. You probably wonder how to code a trading bot with a chatbot. Try to create a prompt for AI.

Sentiment Analysis

Since GPT-4 can easily interpret human conversational style, it can process social media and other public sources in order to determine the general mood and expectations of DeFi society towards a particular cryptocurrency.

Strategy Building

The trading strategy ChatGPT can produce will be based on analyzing technical indicators, chart patterns, and the history of a token’s price you provide. It can help to make decisions about entering or exiting trades based on price and volume trends. But remember that the results of ChatGPT depend on you. Feeding chat with worthy material and formulating a correct request is extremely important.

How To Use ChatGPT?

ChatGPT is pretty simple to use. It is accessible and has a convenient interface. Take these easy steps:

Open website
Create an account to access ChatGPT
Give a prompt (request, command)
Get a response
If you are not satisfied with the results, hit the “retry” button.

📍Note that GPT-4 model is available on ChatGPT Plus with a $20 monthly subscription fee and as an API waiting list for programmers to create software and services.

To get a worthy response, you have to formulate a good prompt as well. Too blurred requests will produce inappropriate results. Here are a few tips for writing good ChatGPT prompts for trading strategy:

be specific (add essential details, such as tokens name and period);
don’t be wordy;
be clear (avoid jargon and abbreviations);
give the context (describe the goal and circumstances);
sometimes it’s better to divide your big request into separate parts to receive more accurate answers.

Is ChatGPT Always Right & Safe?

Now we get to the culmination point. Important question: “can I rely on ChatGPT replies according to the crypto prompts?“. The short answer is NO. Let’s figure out why and understand the threats of using ChatGPT for such complex issues as crypto trading.

Rightness

ChatGPT isn’t an advanced AI invention. In contrast, it is constantly improving. OpenAI notes, “We’ll be updating and improving GPT-4 at a regular cadence as more people use it.” It has a few core limitations, such as social biases, hallucinations, and adversarial prompts. It means we can not suppose the 100% correct answers and fully rely on GPT advice. Here are more details about ChatGPT’s potential and possible failures.

Where does ChatGPT get its information from?

ChatGPT has been trained with various texts from different sources, from books to online articles. All this pre-training information goes up to September 2021. It means ChatGPT can easily create texts that sound correct and believable, even though they are not, because of its machine algorithms. Such a case is also known as ChatGPT hallucination, when the chatbot gives you a wrong fact with some assertion, so you may take such information as truth.

Why can ChatGPT provide incorrect information?

As we mentioned, ChatGPT has knowledge from pre-training information gathered up to 2021. OpenAI cannot access the internet and provide real-time information. Moreover, you cannot use location-based information and provide URLs or references to anything on the internet. Therefore ChatGPT answers may not be reliable for current events and market trends.

Also, while giving examples, articles, or other content to the chatbot to analyze it, you should remember that GPT models can’t differentiate the true and wrong facts for sure. Therefore you have to choose information carefully and check GPT answers.

Take Responsibility for your Crypto Experience

ChatGPT is a great invention that simplifies the process of research. But every opportunity may be a risk, especially when it comes to the crypto industry full of volatility and regular updates.

As a user, you have to understand all the ChatGPT limitations and rely on your analysis and decisions. Don’t spare an effort to double-check the information you receive from ChatGPT. We highly recommend reading more about blockchain security to increase your safety.

Conclusion

ChatGPT crypto trading will gain popularity very fast. We should remember that ChatGPT is not a crypto expert. It might assist in analyzing and building the assumption and can offer you pretty good solutions. But the primary responsibility is on the user. Therefore, don’t be lazy to do additional research after communicating with AI.

While using ChatGPT, we should keep in mind that it can be wrong. Since it hasn’t connected to the internet and all the pre-trained data were collected up to 2021, ChatGPT may not include the recent facts and crucial changes in the world. Moreover, it is not a calculator, oracle, or professor but a language model that works by patterns. Be very careful with calculations or any other complex tasks, according to crypto trading.

Despite all the possible risks, we can deny the huge utility of this invention. Correct use and constant improvements of ChatGPT can be a breakthrough in your user experience on Biswap DEX. Explore new opportunities and trade with favorable conditions!