Using AI to Assist in Gaining a Trading Edge? Santiment's Very Own Bot Allows You to Test the Waters!

ChatGPT and AI in general have been the talk of the town since the latter portion of 2022, particularly in tech and crypto circles. Its achievements and potential are already well documented for creating new content and perspectives using existing human facts, theories, and understandings of the world we live in.

Often, the thing that holds many traders back isn't one particular strategy. It's having the ability to balance them with other simultaneous strategies that make that one strategy better, and having the discipline to maintain this level of focus when markets begin to lead you to make irrational decisions and skew you away from the original strategy.

So it was only a matter of time until these early iterations of free and open AI tools started to make their way toward being used to assist in finding superior investing strategies. Last week, this post about ChatGPT being able to predict market moves based on news headlines got us thinking.

Among Santiment's main draw as a platform is its ability to cut through the noise of what the crowd is thinking about crypto markets at any given time, and give natural perspectives based on market behavioral data. The concept of having trusted tools that combine both on-chain and social data to tell a reliable story is something that is still very new to cryptocurrency. And using AI is even newer.

Theoretically, if we already are seeing AI's proof of concept in predicting movements of stocks based on sentiment of headlines, there is no reason that cryptocurrency (which is far more sentiment-driven than stocks) can't see a similar phenomenon when mixing with rapidly learning bots.

Santiment has a unique opportunity to create an AI-related product utilizing our established social data pipelines. By providing users with powerful search, clustering, and alpha-seeking capabilities through social data, the sky is the limit for a platform that has among the most comprehensive and fine-tuned API's in the world for this space.

So to get to the crux of what this article is here to talk about, we're excited to announce that we already have an AI feature in progress on our Discord channel that you can experiment with at the time of this writing.

When jumping into the Santiment Discord server, you can simply ask in our #general channel, and ask any of our team for permission to join the #bot-testing channel. Once there, you can ask all sorts of questions, ranging from "How can I be more profitable in my cryptocurrency trading using on-chain strategies?" to "How can I improve at selling at the top?"

You'll be quite surprised with the thoughtful and well-articulated responses you receive. Just make sure to add a bit of specificity to your question, or the information you are given back may be as generic as the question you asked the bot.

We warn that there are limitations on the sources it pulls from right now, and mainly answers questions and expands upon the type of subject material you will find on Santiment Academy. But keep in mind that this is a rather expansive source that has fairly advanced mathematical explanations, and deep explanations that can't easily be deciphered and applied unless you possess a specific expertise in the subject material.

To begin, you will want to type in @Santiment Queries Bot in the Discord chat prompt, and the bot will come right up and activate. Then, simply ask it any kind of question to get a feel for how it works.

You'll notice that there is an area underneath its response to let me know I can ask it a follow-up question in the same thread I have just created to start my conversation with the AI bot. There is also a feedback area at the very bottom, where I've given it a thumbs up for giving me a legitimately rational and logical question to help get my wheels turning.

Asking fairly general questions to our AI is particularly a very useful strategy if you are fairly new to Santiment, and you are still getting the lay of the land.

It can even help you with coming up with good ways to use our existing tools, such as our Social Trends page here. On this subject, I asked it a relatively simple question about terms to look up to measure the crowd's sentiment, but felt that the answer was a bit too generic:

So I decided to expand on it and ask it a follow up question in the existing question thread I made, as the bot indicates I can do. And this time, I got a much more specific answer, with several sentiment keywords that I've never thought of trying to use before to measure sentiment:

Naturally, these 10 positive vs. 10 negative keywords that have been suggested by the bot have to be put to the test in our Social Trends page now. If these are legitimate suggestions to measure positive vs. negative sentiment at any given time, then these heavily positive keyword spikes should be associated with Bitcoin moving down and vice versa for heavily negative keyword spikes...

It's not perfect by any means, but the two groupings of positive and negative keywords does appear to have more "hits" than "misses". The time intervals where the positive blue spikes exceeded the negative red significantly (such as October and November of 2021) does indeed correlate with tops quite well. Even in July through October of 2022, there was one final price drop that occurred until negative sentiment began becoming very prevalent when the bottom hit in November of 2022.

It does appear that with a bit more refinement and working with Santiment's AI bot, a superior comparison query could be produced to find some better inverse correlation between positivity and price downswings, and negativity and price upswings. I'll leave it to you to try seeing where you and the bot can find some areas of improvement. :)

Whether you are new or a veteran in the cryptocurrency space, you could also simply ask questions about how to implement the safest strategies to mitigate your risk in a volatile space. Simply having a text-based Q&A with the bot can register some very thoughtful responses, like so:

And what about something more advanced? How about using Santiment's AI to help you set up a Sansheets model for the first time to provide an auto-updating table to show an asset's daily close price for the past year?

Well, if it's going to give an exact formula for us to plug into Google Sheets using the Sansheets tool, we might as well give it a shot:

Yep! The formula provided by the AI bot produced an automatic and organized table with exactly 365 days of daily Bitcoin price data, going back exactly one year from today. Consider the above the first ever AI-generated auto-updating price table using Santiment's API. Yes, it's very basic. But you can absolutely request the bot to combine metrics, mix and match assets, or even pull data from specific moments in time.

We won't say that the possibilities are endless just yet. A lot of work needs to be done to make this bot reliable for especially deep-rooted questions that goes beyond the scope of intermediate strategies.

The more expert strategies out there for cryptocurrency are particularly hidden in cryptocurrency when compared to other sectors, because, well... those who are making a fortune in cryptocurrency don't feel quite the need to share it with the anonymity in the space.

But like any AI, the more questions it receives and the more feedback it gets, the more outside the box it can get with its answers as it learns from humans. The most successful AI out there has a mutual level of humans learning from the bot, and the bot learning from the humans simultaneously. And this is how Santiment has set up this bot for success.

Our #bot-testing channel should absolutely be looked at as a beta tool with unpredictable outcomes, and it goes without saying that it should be used at your own risk. But we feel confident that this tool has serious potential to be a groundbreaking aid for our entire community. And we welcome you to test its limitations, provide valuable feedback to it, and see how it can grow along with Santiment itself.


Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

Thanks for reading!

If you enjoyed this insight please leave a like, join discussion in the comments and share it with your friends!


Conversations (0)

No comments yet
Be the first to comment