Quant trading can be profitable, but it has been reserved only for traders with extensive resources, coding, and math skills or for large institutions.

That’s no longer the case! Now, thanks to ChatGPT, you can also benefit from quant trading.

A quant trader is someone who uses computer algorithms and programs based on mathematical and statistical models to analyze market data and find trading opportunities.

Let’s go ahead and find a profitable quant trading strategy with the help of GPT-4o. I will show you how simple it is!

How GPT-4o is a Big Leap For Traders

GPT-4o was recently released and has new capabilities compared to previous LLM models.

First, it understands images very well. This is great because now you can upload a chart, and ChatGPT will help you create an indicator or strategy adapted to that chart.

Second, GPT-4o is way faster and more accurate than previous models. Although Claude is also pretty impressive and accurate, GPT-4o is better at understanding images.

According to the HELM leaderboard above, which tracks the performance of different models across different domains, GPT-4o comes right after Claude in terms of the accuracy of the answers.

When it comes to VLMs—Visual to Language Models—GPT-4o is way ahead of the competitors. This is great because we want it to understand our charts well and create a trading strategy based on a chart that we upload to GPT-4o.

If you want to get the best out of any of these AIs, I’d recommend keeping an eye on the leaderboards above, as they evolve extremely fast.

Let’s go ahead and create a profitable trading strategy with ChatGPT. To start, I’d recommend reading this article if you haven’t done it yet：

Create Your Quant Trading Bot with GPT-4o

Full disclosure: I created a bot that generated a 52% return in one month. However, nothing in trading is guaranteed, and past results, as much as we might hope, may not correspond to future returns.

Considering this, the goal of this article is to equip you with the tools to imagine, create, test, and eventually profit from your AI-assisted quant trading strategy.

We will use TradingView to test our AI trading strategy. If you don’t have a free TradingView account, feel free to use my affiliate link at no extra cost to you. Thanks for the support!

Let’s get straight into it.

Step 1 — Select Your Asset

For quant trading strategies such as mean reversion, assets that trade sideways often produce better results. So, I decided to select Ethereum, as it has been trading sideways for months.

I want to see if we can create a trading bot that profits when the market is sideways or even declining.

Step 2 — Prompt GPT-4o with the Chart

Simple prompts are often more effective than very long and complex ones. Your prompt needs to be clear and simple. In this case, I prompted the AI the following together with the chart:

Create a profitable mean regression Pine 5 quant strategy for the asset in the chart.

GPT-4o replied with a strategy that consists of using Bollinger Bands together with RSI.

Step 3 — Copy/Paste the Pinescript Code to TradingView

Go to the Pine Editor on TradingView and paste the code there. Then, add it to the chart. The strategy should now be backtested on the chart and in the Strategy Tester tab.

If you don’t know how to backtest your strategy on TradingView, I would highly recommend checking the steps in the articles below:

✅ Use This ChatGPT Trading Bot to Beat 99% of Wall Street Investors!

✅ Build the Best ChatGPT Trading Bots with my “DEBOPIE” Framework

If you have added the strategy correctly to TradingView, you should see something like the chart below: some open trades on the chart and the backtesting results at the bottom.

Step 4 — Fine Tune Your Quant Strategy

Now, you have to manually optimize your strategy in addition to testing it a hundred times more.

Test your strategy across different time frames and different parameters. Play around with all these values and see which ones produce the best results.

It’s crucial to test your strategy extensively before applying it to real money.

My Outstanding Returns (On Backtesting)

In my backtesting, the strategy created by GPT-4o produced very impressive results, as you can see:

Over a 1-month period, the strategy generated an amazing 52% return trading Ethereum (ETH/USD).

In the chart above, the blue line represents a “buy-and-hold” strategy, which would have returned -7% during this period.

This shows that the mean regression strategy created by AI can be profitable even when the market is trading sideways or even in downtrends.

If you have been following along, you know that I’m building an antifragile investment portfolio that benefits from any market situation.

Although the results above require more testing, I’m glad to see that outstanding returns can be generated even when the market is not favorable.