Using ChatGPT for Stock Trading? Things You Need to Know!

Key Takeaways

• Tools such as ChatGPT offer many unique, unbiased analyses of the stock market.
• ChatGPT can be a valuable tool to simplify complex financial data for investors.
• ChatGPT can offer investors insights into which stocks have a potentially strong financial future.
• Utilizing ChatGPT is a good method to bounce trading ideas off.

Introduction

Unless you have been living in a cave, you're likely already familiar with ChatGPT, what it is, and how to use it. But have you used ChatGPT for stock trading? If not, you are in for a shock. ChatGPT can help streamline your investment decisions and offer you a general understanding of the stock market.

In this article, we will explore seven methods to integrate ChatGPT into your trading strategies. This comprehensive overview will equip you with the knowledge necessary for you to take full advantage of AI when trading stocks.

Seven Methods to Use ChatGPT for Stock Trading Ideas

As an investor, you're likely aware that the investment landscape has changed dramatically over the years, with the introduction of new technology to help us make smarter, more informed investment decisions. ChatGPT is one of these tools, and by utilizing these methods, beginners can quickly grasp the fundamentals and begin generating returns faster than ever.

Method One: Understanding Stock Market Financial Terms

For investors starting out, stock market terminology can be quite confusing and, in some cases, rather frustrating, which is why ChatGPT can assist in making sense of it all and provide detailed, simplified explanations of what each terminology is about.

 ChatGPT Explains Financial Terms

Method Two: Learn About the Stock You Want to Invest in

We know, based on a company's product, a general sense of what the company does. However, large public companies often have their fingers in many pies as it were, using multiple business models that we may be unaware of. Asking ChatGPT more about a business can shed light on whether we still see value in its business overall.

 ChatGPT Provides Tesla Business Model

Method Three: Summarize Stock Market Earnings Calls

Earnings calls are, in some ways, a general overview of a company's financial achievements and health throughout a specific quarter of the year. These earnings calls are a great reflection of whether a company is doing well in the market.

These earnings calls can embed some difficult-to-understand terminology and complex financial data. We can draw upon ChatGPT to assist us in explaining and pointing out key points of a company's earnings report to help us make a better decision on whether to buy, sell, or hold a certain stock.

ChatGPT Summarizes Tesla's Q3 2024 Earnings Call

Method Four: Analyze Financial Information

When you're going to invest, it is important to know exactly who you're investing in. I don't mean who in a personal sense, but rather in a financial sense. Listed companies usually have complex financials that to the average investor can be incredibly daunting and confusing, which is why ChatGPT can help in summarizing and simplifying gruelling financial reports.

Financial information usually encompasses both quantitative data, such as a company's revenue and expenses, and qualitative insights from textual sources, like news articles, analyst reports, and social media posts. As an investor, you can easily find yourself spending hours, or days, going through this information, which may impede or delay a potential trading opportunity.

Method Five: Identify Key Risks With ChatGPT

Risk management is certainly a term you need to be familiar with. It is a way for us to deeply understand any potential pitfalls a company may suffer, which in turn, can make our portfolios suffer. ChatGPT can offer us these preliminary risk insights and help us better see an unbiased view of a company's flaws.

ChatGPT Identifies Key Risks For Investing In Tesla Stocks

Method Six: Ask ChatGPT How Top Investors Analyse Stocks

When you're investing, especially during the early stages of your investment journey, you may want to search for advice. This is how ChatGPT can assist you further by simply asking how top investors, such as Warren Buffet, would interpret a stock and follow the suggestions produced by GPT.

ChatGPT Identifies How Top Investors Analyze Stocks

Method Seven: Compare Different Stocks

Finally, we can utilize ChatGPT to compare different stocks, potentially the ones we screened by using method six. GPT can make relatively accurate comparisons of a company's business, potential future growth, financials, and more, allowing us to clearly define which stocks would be better aligned with our investment goals.

Whether you're new to the stock market, ChatGPT can offer guidance on starting points. Although it's not equipped for making real-time stock selections, the chatbot is a valuable tool for comparing different stocks, helping you navigate choices more effectively.

ChatGPT Identifies the Difference Between Tesla and BYD stock

What are the Limitations of ChatGPT for Stock Trading?

Although ChatGPT is a powerful AI model, it still has limitations, especially when it comes to the financial industry. For example, when asked, "Which stocks were the top gainers yesterday?" ChatGPT's response is that it cannot offer an answer due to not having access to real-time market data.

Furthermore, ChatGPT's training data extends only up to 2021, limiting its ability to incorporate the latest developments from the past year into its responses. However, ChatGPT4.0 can crawl the internet in real-time, but upgrading to ChatGPT4.0 could minimize your ROI, and you will still be hard-pushed to gain any accurate analysis on whether a stock's price will increase or decrease.

ChatGPT Unable to Provide Real-time Market Insights

Are There Alternatives to Using ChatGPT?

The short answer is yes. At Intellectia, our platform is capable of offering insights unavailable to ChatGPT users. For example, when prompted with "Should I Buy Tesla?" Our algorithm analyses real-time market data. Based on this data, our users are offered expert insights into whether you should buy, sell, or hold a stock.

Not only will our algorithm provide you with expert insights, but the AI will also provide a full breakdown of the stock's technical and fundamental analysis. This further enables you to read summarized financial information in seconds.

ChatGPT Financial Alternative: Intellectia AI

Conclusion

While ChatGPT can serve as a helpful personal financial research assistant for navigating the stock market and saving time, it lacks the specialized focus needed for advanced trading. If you're looking for a more AI-directed financial product, you may want to consider using Intellectia instead.

As a beginner, ChatGPT can greatly increase your understanding of the financial market, break down complex information, and even make suggestions on what stock to buy. But like many AI tools, it is limited by its data input and training model and may take time before it can be a fully integrated financial tool for investors.