How to test any trading strategy with AI (no coding needed) — Transcript

Full transcript

1. 0:00How do you find out whether a trading
2. 0:01strategy works or not? There are two
3. 0:04main ways. One costs you a few hours,
4. 0:07the other costs you your account. Most
5. 0:09traders pick the second one because the
6. 0:11first one means either weeks of manual
7. 0:13backtesting or coding skills they don't
8. 0:15have. So, they do what everyone does.
9. 0:18They find an idea on YouTube or come up
10. 0:20with their own. Then they check four or
11. 0:22five examples on TradingView, and if it
12. 0:24looks good, they put money on it. Then
13. 0:26the losses come, and they wonder, is
14. 0:28this a normal losing streak? Does the
15. 0:30strategy just not work? Most traders
16. 0:33never find out. They move on to the next
17. 0:35strategy, and the cycle starts again. No
18. 0:38wonder over 70% of people lose money in
19. 0:40trading, and only about 7% of people get
20. 0:43a payout with prop firms. But for you,
21. 0:46that ends today because in this video,
22. 0:48I'm going to show you how to test any
23. 0:50trading strategy, yours or one you
24. 0:52learned on YouTube, without writing a
25. 0:54single line of code. Next time someone
26. 0:56shows you a strategy, you won't have to
27. 0:58wonder. You'll check it yourself before
28. 1:01you risk a dollar.
29. 1:06To backtest our trading strategy, we are
30. 1:07going to use an approach called Vibe
31. 1:09Coding. Basically, you describe what you
32. 1:11want in plain language, and the AI
33. 1:13writes the code for you. But before
34. 1:15backtesting our first trading strategy
35. 1:17together, I want you to understand how
36. 1:19the setup works because many people just
37. 1:21open a chat in ChatGPT or Claude and
38. 1:23type, "This is my strategy. Can you
39. 1:25build the code for it?" Here, we are
40. 1:27going to take things one step further so
41. 1:29you can start exploring the potential of
42. 1:31Vibe Coding. And you can use this
43. 1:33approach beyond trading, whether you
44. 1:35want to build a business or make
45. 1:36something in your everyday life easier.
46. 1:39The setup I'm going to show you has
47. 1:40three main parts. The AI, which can be
48. 1:43ChatGPT, Claude, Gemini, or whatever you
49. 1:46prefer. Then we have Hermes, and then we
50. 1:49have a service provider. Think of the AI
51. 1:51as the brain. Hermes is the system that
52. 1:53lets you put that brain into agents.
53. 1:56Think of them as your AI employees.
54. 1:58These employees need a place to work.
55. 2:00The service provider gives them an
56. 2:01office with the setup already taken care
57. 2:04of.
58. 2:04Now, everything you'll see in this
59. 2:06video, you can replicate with just the
60. 2:08first two parts for free. Hermes itself
61. 2:10is free, and for the AI, you can use a
62. 2:13free model, or if you already pay for a
63. 2:16subscription like ChatGPT, you can
64. 2:18connect it to Hermes at no extra cost.
65. 2:21The third part, the office, is not free.
66. 2:24Later, I'll show you the advantages of
67. 2:26it and how much it costs, so you can
68. 2:28decide for yourself whether it's worth
69. 2:29it.
70. 2:30So, what's [snorts] the advantage of
71. 2:32working with an agent instead of a
72. 2:33normal chat? There are many, but if I
73. 2:36had to pick the most important one, I
74. 2:38would choose continuity.
75. 2:40A chat can store files and remember
76. 2:42things about you, but everything stays
77. 2:44inside that chat. And a chat can only
78. 2:47hold so much. When it gets long, it can
79. 2:49lose track of earlier details, or you
80. 2:52have to start a fresh one. With an
81. 2:53agent, all the data, the code, the
82. 2:56reports, and the working procedures live
83. 2:58in a workspace, which is a folder that
84. 3:00exists outside any single chat. When we
85. 3:03start a new chat to test a different
86. 3:05strategy, the agent can reuse the
87. 3:07relevant material from that workspace
88. 3:09instead of rebuilding the whole process
89. 3:11from scratch. And the best thing is that
90. 3:13it keeps an internal notebook of what
91. 3:15worked and what went wrong, so it learns
92. 3:17from the previous work and can
93. 3:19self-improve over time, just like a real
94. 3:21employee getting experience working for
95. 3:23you.
96. 3:24On top of that, agents can also be
97. 3:26coordinated and work at the same time,
98. 3:28sharing the same workspace. One can
99. 3:30research trading ideas, one can prepare
100. 3:33reports, one can analyze your trading
101. 3:35journal. You can build your own trading
102. 3:37desk with AI employees working for you.
103. 3:40But why Hermes? Can't we build agents in
104. 3:43ChatGPT or Claude? Absolutely, you can.
105. 3:47But imagine you build your agents in
106. 3:48ChatGPT, and then Claude releases a much
107. 3:51more powerful model, or maybe ChatGPT
108. 3:54raises the price of its subscription.
109. 3:56You want to move, but all your work is
110. 3:58in ChatGPT, and moving it takes time and
111. 4:01knowledge you may not have. With Hermes,
112. 4:04you can use ChatGPT or Claude or any
113. 4:06other model and swap them without
114. 4:08starting over because all your work is
115. 4:10saved in a workspace outside the AI.
116. 4:14The third part of the setup is the
117. 4:15service provider, which gives your
118. 4:17agents the office and the setup. This
119. 4:19brings us to the sponsor of this video,
120. 4:21Hostinger. But, I'm not going to bore
121. 4:23you with the usual 1-minute talk trying
122. 4:25to brainwash you about how great
123. 4:27Hostinger is. I prefer to show you along
124. 4:29the way why I personally use Hostinger
125. 4:32and why I think it's great value,
126. 4:34especially for beginners. By the end of
127. 4:36this video, you will have a clearer idea
128. 4:38of whether Hostinger is for you or not.
129. 4:41Hostinger provides a product called
130. 4:42managed Hermes. It runs Hermes on
131. 4:45Hostinger's server and gives you a
132. 4:46beginner-friendly interface to manage
133. 4:48it. You can install Hermes, update it,
134. 4:51restore a backup, connect it to Telegram
135. 4:53so you can talk to your agents from your
136. 4:54phone, and much more. And Hostinger
137. 4:57takes care of the setup so you can
138. 4:58manage all these features with a few
139. 5:00clicks rather than working from your
140. 5:02terminal. So, with Hostinger's managed
141. 5:04Hermes, no technical expertise is
142. 5:06needed.
143. 5:07Let's install Hermes so we can start
144. 5:09vibe coding our first trading strategy.
145. 5:11Here, we're inside Hostinger. On the
146. 5:14left side, we can find Hermes agent and
147. 5:16all we have to do is click on setup. It
148. 5:19will ask you which app you want to
149. 5:20install and we choose Hermes agent web
150. 5:22UI.
151. 5:24Now, it lets you choose the brain you
152. 5:25want to give to your agent. You can
153. 5:27always change this later. For now, I'm
154. 5:29going to select nexos.ai,
155. 5:31but we will come back to this later on.
156. 5:34Here, it asks if I want to connect
157. 5:35Telegram so the agents can send me
158. 5:37updates on Telegram, but I'm going to
159. 5:39skip this for now.
160. 5:41Done. Hostinger created your access to
161. 5:43Hermes. This is the random name it
162. 5:45assigned to it and before clicking on
163. 5:47open app, I recommend you copy the
164. 5:49password and store it somewhere safe.
165. 5:51You will need it whenever you want to
166. 5:53log in to Hermes. After that, we can
167. 5:55open the app, insert the password, and
168. 5:57we are in. Welcome to Hermes.
169. 6:00It looks very similar to most AI
170. 6:02interfaces. At the bottom, you can
171. 6:04choose the model you want to use. There
172. 6:06is a list of popular models from Claude,
173. 6:08Deep Seek, Gemini, GPT, and more, but
174. 6:11you can also import other models if you
175. 6:13want.
176. 6:14Then, you can select the effort, just
177. 6:16like most modern AIs.
178. 6:18Now, how to Vibe code our first trading
179. 6:21strategy? What do we need to let our
180. 6:23employee code the trading strategy for
181. 6:24us? We need precise instructions. I have
182. 6:28made a text file with instructions for
183. 6:30the agent. You can download it for free
184. 6:32on GitHub. The link is in the
185. 6:33description of this video. Once you
186. 6:35click on the link, you can either copy
187. 6:37the prompt or download it. I'm going to
188. 6:39copy it, paste it into my Hermes chat,
189. 6:42and I can finally start the process of
190. 6:44testing my trading strategy.
191. 6:46Now, in a normal chat, you ask
192. 6:48something, the AI replies, then you
193. 6:50continue. It's you driving the
194. 6:52conversation. With the agent, you
195. 6:54immediately see that it's different. You
196. 6:57give instructions about what you want to
197. 6:58get done, and the agent starts to ask
198. 7:00you questions to get the information it
199. 7:03needs to complete its job. So, it's the
200. 7:05agent driving the conversation. I'm
201. 7:07going to fast forward this so I can show
202. 7:09you the relevant parts.
203. 7:11The first thing the agent asks me is my
204. 7:13programming level. If I'm a beginner, it
205. 7:16will handle all the technical work and
206. 7:17routine fixes. If I'm intermediate, it
207. 7:20will also show me relevant code and
208. 7:22recommend solutions. And if I'm
209. 7:24advanced, it shows me the code and lets
210. 7:26me approve it or change it before it
211. 7:28goes ahead. Since we are doing this from
212. 7:30a beginner's perspective, I'm going to
213. 7:31select beginner.
214. 7:33Which asset or market do you want to
215. 7:35test? Let's say I want to test my
216. 7:37strategy on the NASDAQ. I already have
217. 7:40the data from Dukascopy, so I specify
218. 7:42that, too.
219. 7:43Now, the time frame. Let's work on the
220. 7:4515-minute time frame.
221. 7:47Now, it asks me about the period I want
222. 7:49to test. Let's do from January 2016 till
223. 7:52today, since I usually use this period
224. 7:54in my other backtesting videos.
225. 7:57It gives me a quick summary of the
226. 7:58choices so far, and it asks me to upload
227. 8:01the data since I said I already have it.
228. 8:03Next, it starts asking about my
229. 8:05strategy. What makes me enter a trade?
230. 8:08What makes me exit? And whether I would
231. 8:10like to test the whole period or split
232. 8:12it into a training period and a test
233. 8:14period, which is a very good practice
234. 8:16when testing and optimizing a trading
235. 8:18strategy.
236. 8:19I'm not going to spend much time on the
237. 8:21strategy itself because the goal of this
238. 8:23video is not to share the best trading
239. 8:25strategy you'll ever see.
240. 8:27The goal is to understand how to vibe
241. 8:29code your own trading strategy and how
242. 8:31to test it. I'm going to use a simple
243. 8:33strategy that buys the Nasdaq every time
244. 8:36the price crosses the 50 period simple
245. 8:38moving average from below. For the exit,
246. 8:41I'm going to have a stop loss at minus
247. 8:43two ATR and then trail my stop loss
248. 8:45every time the price goes up by three
249. 8:47ATR. And I'm going to test the whole
250. 8:50period since this test is just to show
251. 8:52you how it works.
252. 8:53So, it's like an interview about your
253. 8:55trading strategy. Next, it's going to
254. 8:57ask about the risk per trade, the
255. 8:59trading costs, and so on. We can fast
256. 9:01forward this part. It's really just
257. 9:03about answering questions about the
258. 9:04trading strategy you want to test.
259. 9:07After this, it gives me a final strategy
260. 9:09recap for me to approve. It also
261. 9:11includes two examples of trades from
262. 9:13real charts, so you can verify whether
263. 9:15it replicates what your strategy does.
264. 9:18You can either verify these examples on
265. 9:20your charts like TradingView or you can
266. 9:22open the workspace here on the right
267. 9:24side and follow the path the agent gave
268. 9:26you. So, trading research, strategies,
269. 9:30Nasdaq, examples, and let's check the
270. 9:33image of the first example. I can open
271. 9:35it in the browser or download it so I
272. 9:37can see it at full size.
273. 9:39Yeah, it looks like it does what it's
274. 9:41supposed to do. It entered at the
275. 9:42crossover between the price and the
276. 9:44moving average. It set an initial stop
277. 9:46loss two ATR below the entry. Then,
278. 9:49after the price went up three ATR, it
279. 9:51raised the stop, and then we got stopped
280. 9:54out at the new stop loss. So, I'm going
281. 9:56to tell the agent that everything looks
282. 9:58good and it can proceed with coding the
283. 9:59strategy and testing it.
284. 10:02And here are the results. $100,000
285. 10:05turned into $2,128,888.30
286. 10:11with an annualized return of 32.65%.
287. 10:15The strategy looks good until we see the
288. 10:17drawdown, which is 74.07%
289. 10:21too high to justify this kind of return.
290. 10:24And you can see that the profit factor
291. 10:26is barely above one.
292. 10:28The agent also gives you a summary of
293. 10:30what seems to work in the strategy and
294. 10:32what doesn't. But you can also retrieve
295. 10:34the full report from your workspace.
296. 10:36Hermes gives you the path here. In the
297. 10:38workspace, you won't just find the
298. 10:40report, but also all the data, the code
299. 10:43the AI built, the trading journal with
300. 10:45all the details of every single trade
301. 10:47taken during the backtest, and more.
302. 10:50So, where is all of this stored?
303. 10:52Without Hostinger, it's on your
304. 10:54computer. With Hostinger, it's on their
305. 10:57server. And that's why I personally use
306. 10:59it. Having these files on Hostinger
307. 11:02rather than on my computer means three
308. 11:04things. First, I can work from anywhere.
309. 11:07Today, I'm on my home computer.
310. 11:09Tomorrow, I can log in from my laptop at
311. 11:11the airport or at a coffee shop and pick
312. 11:13up exactly where I left off because the
313. 11:15work is on Hostinger, not on my home
314. 11:17computer. I don't need to download or
315. 11:19transfer anything. Second, my computer
316. 11:22stays clean. All these files in the
317. 11:25workspace can add up to several
318. 11:26gigabytes, and I don't want them to take
319. 11:28up space on my computer. Managed Hermes
320. 11:31comes with 25 GB of storage included in
321. 11:33the price. Third, if I want to leave a
322. 11:36task running, I don't have to leave my
323. 11:38computer on. My agent can continue
324. 11:40working on Hostinger even when my
325. 11:42computer is off. So, how much does all
326. 11:44of this cost? They're currently running
327. 11:46a Black Friday sale with up to 85% off
328. 11:49selected plans. The 24-month option goes
329. 11:52for $4.99 a month. There's a 30-day
330. 11:55money-back guarantee, and if you click
331. 11:57the link in the description and apply
332. 11:59the promo code Revelio, you get an
333. 12:01additional 10% discount on top of the
334. 12:04Black Friday deal. And you support the
335. 12:06channel, too. So, thank you very much,
336. 12:08and thank you, Hostinger, for sponsoring
337. 12:10this video. So, back to our report. It
338. 12:13gives you a first summary of the
339. 12:14strategy. Then, scrolling down, you can
340. 12:17find more detailed results and metrics,
341. 12:19then an equity chart, a drawdown chart,
342. 12:21and more.
343. 12:23All of this is customizable. As I said
344. 12:25earlier, the agent keeps an internal
345. 12:27notebook. So, when you tell it something
346. 12:29that you don't like, it will remember it
347. 12:31and will apply your changes next time.
348. 12:33For example, I would like to compare my
349. 12:35equity curve with a simple buy and hold
350. 12:38equity curve, so I can see the
351. 12:39difference on the chart. I'll tell my
352. 12:41agent later, so the next report will
353. 12:43include it.
354. 12:44The more time you spend with the agent,
355. 12:46the more it learns your workflow and
356. 12:48your preferences.
357. 12:50The report also includes results year by
358. 12:52year. There's an assessment of what
359. 12:54helped and what hurt the strategy, so
360. 12:56you can try to improve it, and more.
361. 12:59Now, let's move to the next part,
362. 13:01optimization. I always recommend
363. 13:03splitting the period into a training
364. 13:05sample and a test sample, so you
365. 13:07optimize on the training sample before
366. 13:10you open the test sample. But, since
367. 13:12this is just a demonstration, I have
368. 13:14used the whole period. So, I'm also
369. 13:16going to run the optimization on the
370. 13:17whole period. The agent suggests three
371. 13:20potential areas of improvements we can
372. 13:22test. I'm going to take two of them,
373. 13:24because I didn't like the drawdown. It
374. 13:26was too high. And, I also didn't like
375. 13:29that we paid a lot in overnight fees.
376. 13:31So, I'm going to ask my agent to test
377. 13:33what happens if we reduce the risk from
378. 13:351% to 0.5% of high watermark, and if we
379. 13:39close the trades right before paying
380. 13:41overnight fees, and reopen them right
381. 13:44after.
382. 13:45And, here we have the report of our
383. 13:47optimized strategy. It makes much less
384. 13:49money, but with less than half the
385. 13:51drawdown we had before. Overall, not a
386. 13:54trading strategy I would use in my
387. 13:56portfolio. Of course, we can keep
388. 13:58optimizing based on the suggestions the
389. 14:00agent gives us, or testing our own
390. 14:02ideas. But, that's not the point of this
391. 14:04video. I wanted to show you how to run
392. 14:06the whole framework without knowing how
393. 14:09to code.
394. 14:10Now, let's talk about how much this
395. 14:11costs. As mentioned, Hermes itself costs
396. 14:15nothing, but using the AI inside Hermes
397. 14:18usually does. There are three main ways
398. 14:20to use an AI model inside Hermes. The
399. 14:23first way is to connect Hermes to a free
400. 14:25model, so you don't have to pay a cent
401. 14:27to use it. There are several free models
402. 14:30you can use, including Hermes' native
403. 14:32ones. Hostinger once again makes things
404. 14:35easy, and you can connect to Gemini in a
405. 14:37few simple steps. You just need to click
406. 14:39on Hermes agent, then manage
407. 14:42AI provider, and you will find Gemini
408. 14:44here. It will ask you to enter your API
409. 14:47key, which is just a long password
410. 14:49Google gives you, so Hermes can use
411. 14:51Gemini. You can find it by clicking this
412. 14:53link here.
413. 14:55I already have one, and you can see it
414. 14:57set on the free tier, which allows me to
415. 14:59use Gemini's free models in Hermes. If
416. 15:02you don't have one, you can click here
417. 15:04and it will create one for you. Once you
418. 15:06have it, you can copy the key and paste
419. 15:08it into Hostinger. Click save and
420. 15:10update, and you're ready to use Hermes
421. 15:12with Gemini for free.
422. 15:14Now, free doesn't mean unlimited. Free
423. 15:17models have restrictions on the volume
424. 15:19of requests you can send to the AI. For
425. 15:21normal chatting and tasks, free models
426. 15:24are great, and you rarely hit their
427. 15:25limits. For an agent that has to
428. 15:27understand your trading strategy,
429. 15:29download the data, clean it, turn your
430. 15:32strategy into precise rules, write the
431. 15:34code, test it, optimize it, and create
432. 15:37reports for you, you can understand
433. 15:39that's a lot, and free models are not
434. 15:42always capable of handling all of this
435. 15:44before hitting their limit and stop
436. 15:45working for the day.
437. 15:47This brings us to the second way, which
438. 15:49is to connect Hermes to your ChatGPT
439. 15:51subscription. To do that, you need
440. 15:54either a plus or pro subscription with
441. 15:56ChatGPT. Once again, Hostinger makes
442. 15:58things easy. You can connect to your
443. 16:00ChatGPT with just a click, and then
444. 16:03follow the simple instructions on
445. 16:04screen.
446. 16:05Once you connect it, you can use it
447. 16:07within the limits of your ChatGPT
448. 16:09subscription. You can still use ChatGPT
449. 16:11normally in its own app. The two just
450. 16:14share the same allowance.
451. 16:16The last way is to use credits. You put
452. 16:18some money in, select any model, and pay
453. 16:21as you go. When we installed Hermes, I
454. 16:23chose Nexo's.ai Hostinger AI router,
455. 16:27which uses Hostinger AI credits. I
456. 16:29tested different AI models with credits,
457. 16:31and here is how much it cost me to do
458. 16:33all this work with different models.
459. 16:36Astra and Fable may look expensive, but
460. 16:39they did an excellent job. Also, in
461. 16:41terms of presentation and improvement
462. 16:43suggested. And in any case, $34 is still
463. 16:47much less than a programmer would charge
464. 16:49you for coding and testing a strategy.
465. 16:51GPT-6 Luna did a decent job. It made an
466. 16:54assumption that didn't match the
467. 16:56strategy I had in mind. So, the first
468. 16:58backtest wasn't testing exactly what I
469. 17:00wanted. After going back through the
470. 17:02rules with the AI, we found the mistake
471. 17:04and built the right code. For 45 cents,
472. 17:07I can honestly say it provided good
473. 17:09value for money.
474. 17:11What I showed you in this video is only
475. 17:14the beginning of what you can do with
476. 17:15this setup. I moved to Hermes from Open
477. 17:18Claw myself only last month. I'm still
478. 17:21learning every day, and it feels like
479. 17:23I've barely scratched the surface.
480. 17:25I hope this video gave you what you
481. 17:27needed to take action and start vibe
482. 17:29coding your first trading strategy. If
483. 17:31you decide to give Hostinger a try, you
484. 17:33can support the channel by using my link
485. 17:35in the video description and applying
486. 17:37the promo code "revelio" for an
487. 17:39additional 10% discount. Thank you,
488. 17:41Hostinger, for sponsoring this video,
489. 17:43and thank you all for supporting the
490. 17:45channel. I'll see you in the next video.