I think AI is going to become one of the most useful tools traders have ever had access to, but I also think a surprising number of people are going to become worse traders because of it. And the interesting part is that both groups will probably be using the exact same tools. They’ll have access to ChatGPT, Claude, Gemini and increasingly sophisticated models, yet some will use them to improve their decision-making while others will simply become more confident in decisions they never properly understood in the first place.
I’ve been trading for more than six years now, and something I’ve noticed throughout that time is how easily we confuse having more information with actually understanding something. Years ago, it might have meant watching another trading video with a more convincing explanation of where the market was heading. Today, you can open an AI chatbot, upload a screenshot of your chart and receive an incredibly detailed explanation of what price might do next. The response can sound professional, include technical terminology and give you five reasons why your idea makes sense, but none of that necessarily tells you whether the trade has a statistical advantage.
What makes this particularly interesting is that researchers are already finding evidence that AI can reinforce some of the same biases that cause investors to make poor decisions. In a 2025 study examining large language models and investment advice, researchers found that AI-generated advice could increase several dimensions of portfolio risk and reinforce existing investment biases. In other words, a tool that appears to provide objective, intelligent advice can sometimes make the very problems you’re trying to solve even worse.
But there is another side to this, and I think it’s considerably more interesting. AI can help you investigate years of trading data, identify inconsistencies in your execution, challenge assumptions you’ve held for years and accelerate parts of your research that would otherwise take days. The difference comes down to what you ask it to do, what information you give it and how you verify its answers. I’ve been thinking about this a lot because the most valuable applications of AI for trading are rarely the ones people are excitedly sharing on social media.
In today’s letter, I want to explain how I would actually use AI to become a better trader, including practical workflows and prompts you can adapt to your own strategy. More importantly, I want to explain where I would deliberately avoid using it, because that distinction might matter more than any individual tool or prompt.