I evaluated Grok 3 as the best AI model for traders and investors. Here’s how you can fully utilize its power
If you ever wondered what the best, non-stealth AI model is for complex financial tasks, the answer is simple: Grok.
Figure 1: Performance comparison of leading AI models for SQL query generation. Grok-3-Beta demonstrates the highest average score (0.747) and perfect score rate (67.5%)I know this for a fact. In a previous article, I talked about how I used the open-source EvaluateGPT to analyze every single major large language model objectively. Using this framework, I evaluated Grok as the best model for advanced financial tasks.
This article will NOT be a re-statement of that article or trying to “prove” Grok is the best.
No. This article will be a lot more practical – a guide on YOU can use the best language models to make you a better trader and investor.
Nonetheless, if you’re more technical and want to see how these language models are evaluated, then check out the following article.
How can AI help you make better trading decisions?
AI can help you make better trading decisions by doing the hard work of shifting through market noise.
Using AI tools like NexusTrade, you can:
- Test different investing strategies and see which ones fare well in different market conditions
- Find novel stock buying opportunities, including fundamentally strong stocks are stocks that are oversold
- Stay up-to-date on news for your favorite stocks so you’re always in-the-loop.
Let me show you how this works using the NexusTrade platform.
How to use the BEST AI models to improve your trading and investing?
To use the best AI models, you simply have to do the following:
The NexusTrade chat page. The AI gives you a bunch of suggested questions to get started- Click “Settings” on the right-hand side
The settings panel. You can adjust things including the model and the “quicktest” settings, which sets the default start and end date and simulated “backtest fees”- Click the model you want to use. For this article, we’re going to stick with Grok 3 Mini Beta, but all of the best models, including Claude 3.7 Sonnet and Gemini Flash 2 are available to use
Don’t see a model that you like? Leave a comment and I’ll add it faster than you can say “NexusTrade rocks!”
Once you have the model setup, you can ask any type of hard financial question. Here are some examples.
Structuring this section
To help readers extract the most value from this section, I’m structuring in the following way:
- Header (hyperlinked with the direct link to the full conversation)
- Question: What exactly did I ask the AI?
- Answer (Screenshot): What did the AI respond?
- Direct link: A direct link to the full output of the AI model
This will allow you to review the AI’s responded without having to stare at this tiny little screenshots. It’ll also allow you to follow along, so YOU (yes, you) can become an algorithmic trader. You can continue from where the conversation left off or copy paste what I said into the chat.
When following along, please note that I have my backtest settings to automatically test from Jan 1st 2025 to April 10th 2025. If your backtest looks different than mine, change the settings.
The backtest settings used for thisNow, let’s get started!
Let’s say I wanted to test out different investing strategies and see which ones fare well in the long-term. Here’s how I would do this.
First, I will start with an idea. My idea is “stocks with a high market cap tend to perform better”. Then I will test it.
To start, I’ll first fetch a list of stocks with a high market cap. I’ll choose to do so in the past to avoid lookahead bias.
What are the top 100 stocks by market cap as of Dec 31st 2024?
Using AI to quickly fetch the stocks that conform to our criteriaThen, I’ll create a strategy and test it out this year to see how it performed compared to the broader market.
Create a strategy that rebalances the top 25 stocks by market cap every 3 months at equal weight
The backtest results for our trading strategy in the chatUsing AI, we were able to test out this complex trading strategy within seconds. We know that at least during this time period, stocks with a higher market cap performed slightly worse than just holding SPY (-7.26% vs -6.72%).
Zooming in on the backtest, we can also see other metrics like our sharpe ratio, sortino ratio, and drawdown. These metrics tell a story of how risky our strategy is compared to the broader market.
A closer look at our backtest results, including performance metricsUsing this same exact methodology,
- We can change the rules to rebalance every week. Or every 3 months
- We can test it out in different time periods like Covid or during presidential elections
- We can test with other metrics like revenue or free cash flow
- We can include more complex conditions, different actions (like “buy” or “sell”) or add filtering logic for the strategy. For example, we may want to exclude the “Magnificent 7” and see how our results perform.
All of this possible from a regular conversation with an AI.
Once we’re done, we can take the trading strategies we’ve created, deploy them live to the market, and even monetize them if they’re successful!
To read the full conversation, check out this link.
In addition to testing trading strategies, you can use AI to find novel stock buying opportunities. This includes using technical indicators and fundamental indicators to sift through the market.
For example, let’s try to find fundamentally strong stocks that are potentially oversold.
What AI stocks with a market cap above $20B and a fundamental ranking above 2.5 have the lowest RSI?
“Fundamental ranking” is a shortcut for understanding if a company’s business is strong. I generated this by supplying the earnings of every company into a language model and asking the model to evaluate the company fundamentally. By filtering on stocks with a ranking above 2.5, I get all stocks that have AT LEAST a “decent” business.
The model responds with the following:
Stocks that conformed to our criteriaSimilar to what we did above with the trading strategies, we can then take these stocks and test out different trading ideas or create a new watchlist of stocks.
Add these stocks to a new watchlist
The AI creating a watchlist from these stocksBy creating a watchlist with these stocks, we can remember them for later, which can help us inform what stocks we want to buy at a given moment.
Giving our watchlist a name after clicking “Save Watchlist”Additionally, we also get a daily email on what’s going on with these stocks in the news.
The news snippet I configured in NexusTrade to send me notifications about my watchlistHowever sometimes, waiting until the end of the day is too long, and we want to know what’s happening with these stocks RIGHT NOW.
We can do that too.
Read the full conversation for this section here.
Using AI, we can automatically find the most relevant news that we care about right now.
For example, I’m an avid NVIDIA trader/long-term holder.
Seeing that NVIDIA was down today, I might want to understand “why” without having to search the news manually.
Now, I can within seconds.
What’s going on in the news with NVIDIA today? Why did it fall?
Comprehensive description of how NVIDIA in the news todayThis isn’t limited to just particular stocks. We can analyze groups of stocks or even search for news based on broader industries.
What’s in the news for AI this week?
Different important AI news for this weekNews about anything you want, right at your fingertips.
How insane!
Read the full conversation for this section here.
What other things can AI do?
This is just the start of what AI can do to help make you a better trader. Some other things you can ask it includes:
- (After uploading an attachment) “Analyze this watchlist fundamentally”
- “Backtest the strategy you’ve created across the Covid pandemic”
- “What is the difference between technical and fundamental analysis?”
If you need help, the NexusTrade platform even has in-app tutorials to show you step-by-step how to make the most out of the platform.
What are the limitations of AI for these tasks?
While AI is powerful for financial analysis, it’s not without limitations. Even the best models like Grok 3 have constraints that traders should be aware of:
- AI cannot predict unexpected market events or “black swan” scenarios that haven’t occurred in historical data
- The accuracy of these models fully depend on the data that’s inputted into it. The old data science adage remains true: “garbage in, garbage out”
- Technical accuracy doesn’t replace human judgment about risk tolerance or investment goals
- AI tools work best as supplements to your trading knowledge, not replacements for fundamental understanding
- Backtesting results, while useful, don’t guarantee future performance in different market conditions
Conclusion
The future of trading and investing is here, and it’s AI-powered. With tools like NexusTrade’s Grok 3 integration, you can quickly test trading strategies, find novel buying opportunities, and stay informed with comprehensive news analysis — all in seconds instead of months (or longer).
Ready to experience the power of AI-driven trading? Try NexusTrade today and see how the best language models can transform your investment approach. Sign up at nexustrade.io and join thousands of traders who are already leveraging AI to gain a competitive edge in the market.
