Financial Analysis - Build a ChatGPT Pairs Trading Bot - Long-Only Strategy

The video tutorial introduces the long only trading strategy, highlighting its practicality for most traders compared to short selling, which requires a margin account and is riskier. The instructor explains the risks of short selling, such as unlimited potential losses if the stock price rises. The tutorial then demonstrates how to apply the long only strategy using signals and Bollinger Bands, emphasizing selling instead of short selling to maintain constant capital. Finally, the video covers how this strategy is coded, using specific indicators to manage positions.

Why is the long only strategy considered more practical for most traders?

• It guarantees profits.

• It does not require a margin account.

• It requires less capital.

• It is less time-consuming.

What is one of the main risks associated with short selling?

• It requires a lot of paperwork.

• The stock price can drop to zero.

• It is illegal in some countries.

• The stock price can rise indefinitely.

How does the long only strategy limit potential losses?

• By diversifying the portfolio.

• By setting a stop-loss order.

• By only investing in blue-chip stocks.

• By avoiding short selling.

In the context of the long only strategy, what is the purpose of using Bollinger Bands?

• To identify entry and exit points.

• To calculate the average stock price.

• To predict future stock prices.

• To determine the stock's volatility.

What does a zero indicate in the code for the long only strategy?

• Close a long position.

• Initiate a long position.

• Initiate a short position.

• Hold the current position.