Revolutionizing Trading with Generative AI: Tailored Strategies for Every Investor

Aelium
4 min readJan 24, 2024

In the ever-evolving landscape of financial markets, the power of personalized trading strategies cannot be overstated. Aelium’s generative AI prompt is at the forefront of this revolution, offering investors and traders the ability to craft custom strategies that align with their unique goals and market perspectives.

The Role of AI in Strategy Development

AI stands out in its ability to analyze vast amounts of market data, learn from trends, and generate trading strategies that are both innovative and effective. Unlike traditional methods, which rely heavily on manual analysis, AI introduces a level of depth and sophistication that was previously unattainable.

AI can be expressed in various ways, for example Generative AI and Predictive AI; in this article we will focus on the generative one.

Strategy creation process with generative AI (genAI)

Custom Strategy Creation

The true beauty of Generative AI lies in its versatility. Whether you’re looking to trade based on volume changes, price action, market sentiment, or complex combinations of indicators and economic factors, Aelium technology can develop a strategy tailored to your needs. From simple momentum-based strategies to advanced approaches that consider global economic shifts and intricate market correlations, Generative AI can handle it all without the need to have advanced programming experience, or having to dedicate excessive effort in writing code.

GenAI prompt for on-demand strategy creation

Beyond Basic Strategies

Generative AI is not limited to basic technical analysis. It can integrate a variety of external indicators, a plethora of alternate data, and even sentiment analysis from news and social media, offering a holistic approach to strategy creation. This capability allows traders to stay ahead in a market that’s influenced by a myriad of factors, both predictable and unforeseen.

The genAI strategy below, which is relatively complex to be written by someone without the right skills, goes long when the asset’s correlation with the market cap is low and exits when the correlation starts to rise again.

def strategy(config, data):
"""
This strategy goes long when the z-score of asset correlation
with market cap is below 0.5 and exits when z-score is 0.
"""

# parameters setup
zscore_th = 0.5
window = 14
# retrieve the prices data
ohlcv = pandas.DataFrame(parse_ohlcv(data), index=data.index)
# parsing external data
# MVDA25 MarketVector™ Digital Assets 25 Index
index = data.filter(like=':mvda25').pct_change().squeeze(axis=1)
# calculating correlation
corr = ohlcv['close'].rolling(window).corr(index).rename('corr')
# calculating z-score using talib
zscore = ta.zscore(corr, length=window)
# positions object
positions = pandas.Series(numpy.nan, index=data.index)
# defining long and exit signals
long_signals = (zscore <= -zscore_th)
exit_signals = (zscore >= 0)
# setting positions based on signals
positions.loc[long_signals.values] = 1
positions.loc[exit_signals.values] = 0
positions = positions.ffill().fillna(0)

return positions

Then it can be easily imported and deployed.

The auto-generated strategy code can be easily imported in Aelium
Advanced-view visualization of strategy data flow (MVDA25 is MarketVector™ Digital Assets 25 Index)

Accessing Generative AI’s Advanced Capabilities

The advanced capabilities of Generative AI for custom strategy creation are a game-changer and they can be accessed through the Aelium platform. Utilizing the premium features of advanced AI models like ChatGPT in conjunction with our knowledgebase and custom templates, we can help investors and traders in developing and fast prototyping strategies that are specifically catered to their trading style and objectives.

The backtest of the strategy is then displayed within the platform and if the strategy is considered satisfactory, it can be further optimized and executed dynamically directly from Aelium.

Strategy backtest

Conclusion

Generative AI is redefining the boundaries of financial trading. It empowers traders to move beyond traditional, one-size-fits-all strategies and embrace a future where each trading decision is informed by personalized insights and advanced analytics. Whether you are a beginner or an experienced trader, the potential of Generative AI to enhance your trading strategy is boundless. Explore the possibilities with us and take a step into the future of trading.

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