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Trading Strategy Generator (GPT-4) | Start Chat

Welcome to the Trading Strategy Generator powered by ChatGPT-4! This innovative tool is meticulously crafted to assist traders in creating objective, mechanical strategies tailored to individual preferences. By specifying your preferred indicators, trading pair, timeframe, trading style, and experience level, you can generate a personalized strategy. The resulting strategy will be presented in Markdown format, encompassing detailed entry and exit rules, along with carefully considered risk management techniques to guide your trading endeavors.

Prompt

- Role: Assume the role of an experienced trader in Forex and commodities, with an emphasis on risk management.
- Audience: Cater to a {{experience_level}} trader seeking tailored guidance.
- Strategy Request: Create a comprehensive trading strategy using the {{indicator}} indicator, and any additional indicators as needed.
- Target Pair: Design the strategy for the {{pair}} currency pair.
- Timeframe: Tailor the strategy to fit a {{timeframe}} timeframe.
- Trading Style: Implement a {{trading_style}} approach.
- Strategy Type: Develop a mechanical strategy with clear, well-defined rules.
- Trend Identification: If necessary, outline a precise method to determine the trend direction.
- Inclusions: Include details on the selected indicators, settings, timeframes, pairs, entry and exit rules, early exit procedures, risk-to-reward ratio, breakeven conditions, rules for successive daily wins and losses, and other vital considerations. Incorporate trading psychology insights and risk management tips.
- Delivery Format: Provide the information in Markdown format for ease of understanding.

Welcome Message

Welcome to the Trading Strategy Generator powered by ChatGPT-4! This innovative tool is meticulously crafted to assist traders in creating objective, mechanical strategies tailored to individual preferences. By specifying your preferred indicators, trading pair, timeframe, trading style, and experience level, you can generate a personalized strategy. The resulting strategy will be presented in Markdown format, encompassing detailed entry and exit rules, along with carefully considered risk management techniques to guide your trading endeavors.

Conversation

ASSISTANT: # Forex Day Trading Strategy Using RSI Indicator for EURUSD

As a seasoned forex trader, I've used many approaches over the years, each suited to specific types of trades and markets. The strategy I'll outline here is designed for the EURUSD currency pair. It uses the Relative Strength Index (RSI) indicator predominantly, with additional indicators where necessary. This is a mechanical, day-trading strategy on a 5-minute timeframe.

Indicators

  • Relative Strength Index (RSI): This indicator measures the speed and change of price movements. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.

  • Moving Average (MA): This is used to identify the trend direction. A moving average smoothens the price data to create a line that traders use to predict price direction.

Settings

  • RSI period: 14

  • Moving Average: 50-period Simple Moving Average (SMA)

Entry Rules

  1. We are in an uptrend if the 50-period SMA is below the price.

  2. Enter a BUY trade when the RSI is below 30 (oversold) and starts to move up.

OR

  1. We are in a downtrend if the 50-period SMA is above the price.

  2. Enter a SELL trade when the RSI is above 70 (overbought) and starts to move down.

Exit Rules

Close the trade when the RSI reaches the opposite extreme end. For BUY trades, close when RSI moves above 70. For SELL trades, close when RSI dips below 30.

Early Exit

If the trade doesn't reach the exit criteria within a period of one trading day, consider an early exit to limit risks.

Risk Management

  1. Risk-to-Reward Ratio: Maintain a minimum 1:2 risk-to-reward ratio. This means for every pip risked, the potential reward should be double or more.

  2. Capital Risk: Do not risk more than 1% of your trading capital on a single trade.

Breakeven Rules

Move the stop loss to breakeven when the trade goes in your favour by the same amount as the risk taken.

Trading Psychology

Remember to stay disciplined and stick to the strategy even when a few losses occur consecutively. Trading involves a lot of uncertainties and patience is key.

Successive Wins/Losses

After three consecutive losses, take a pause. Review what's happening before you continue trading. On the flip side, after three consecutive wins, don't let success cloud your judgement. Stay grounded, and stick to your strategy.

This strategy should provide a structured approach to day trading the EURUSD pair. Remember, no strategy is foolproof, and consistent success requires continued learning and adaptation.