Machine Learning for Financial Trading

Revised & Improved Version:

When people hear "AI," they often think of ChatGPT or other generative AI models categorized as LLMs (Large Language Models). However, a new AI paradigm is gaining attention—Agent AI, which I’ll explore in this article.

The Four Categories of AI

Before diving into Agent AI, let's first classify AI based on how it is trained and its purpose:

1. Supervised AI – This type of AI learns from labeled data, meaning humans (or other intelligent entities) provide direct input-output mappings. Common examples include email spam classification and image recognition. Interestingly, the first version of ChatGPT was a supervised AI model, requiring human-written questions and answers for training.
2. Unsupervised AI – Unlike supervised AI, this category doesn't require manually labeled data. It learns from patterns in raw data. Examples include image recognition for identifying individuals and the latest versions of ChatGPT, which were train...

This is the story of how I built Statera, my first AI-powered trading agent. But before diving into the journey, let’s first understand what a Statera agent is.

What is Statera?

Statera is an AI trading agent designed for spot trading BTCUSDT. Its primary goal is to generate profits exceeding the simple buy-and-hold strategy while managing risks effectively. Sounds simple, right? But in reality, it took me three years to develop a version that consistently generates profits while minimizing losses.

The Beginning: A Flawed Approach (2022)

In 2022, I had the idea of using AI to trade crypto instead of relying on manual strategies, which felt no different from gambling. I began studying algorithmic trading and quickly discovered that technical analysis was widely regarded as the key to success.

However, after extensive manual and algorithmic ...

Crypto News Sentiment (CNS) is a crucial indicator for cryptocurrency traders. It offers real-time insights into the overall sentiment surrounding the crypto market, derived from a comprehensive analysis of news articles.

In this post, I'll delve into:

• How CNS is calculated using advanced AI techniques.
• The significance of CNS as an independent variable influencing market prices.
• The practical applications of CNS for informed trading decisions.

By understanding CNS, you can gain a competitive edge and make more strategic trades in the dynamic crypto market. To calculate Crypto News Sentiment (CNS), a sophisticated AI bot scours numerous crypto-related news sources. This bot analyzes the content of these articles, extracting sentiment values categorized as positive, negative, or neutral. To provide a comprehensive overview, the individual sentiment values are then aggregated into a single score ranging from -1 (strongly negative) to 1 (strongly positive). This aggr...