Understanding LLMs
Made Simple

Learn how AI like ChatGPT works - explained in plain English with visual examples anyone can understand

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What is an LLM?

Think of it as Super-Smart Autocomplete

Try It Yourself!

Your Phone's Autocomplete

You type: "How are..."

you things we

Predicts the next word

ChatGPT (LLM)

You ask: "How are..."

"...stocks performing today? Let me analyze the market trends for you..."

Predicts entire responses!

The Big Difference: LLMs learned from reading billions of web pages, so they can write like humans!

How Do LLMs Learn?

A 5-Step Journey from Internet to Intelligence

1 Collect Data 2.7B web pages 2 Clean Data Remove junk 3 Break Into Tokens Like LEGO blocks 4 Train Model Learn patterns 5 Generate Text Chat with you! ๐Ÿ“š Internet Wikipedia News articles Books ๐Ÿงน Filtered No spam โœ— No malware โœ— Quality text โœ“ ๐Ÿงฑ Tokens "Hello" โ†’ [15339] "world" โ†’ [1917] 100K types ๐ŸŽ“ Learning Predict next word Adjust weights 15T examples ๐Ÿ’ฌ ChatGPT Answers questions Writes content Helps coding

Understanding Tokens

The LEGO Blocks of Language

How Text Becomes Tokens

Input: "The stock market is rising"

The stock market is rising

Token IDs:

791 5708 3157 374 16448

Why Tokens?

1

Computers Need Numbers

Computers can't read words, but they understand numbers perfectly

2

Efficient Processing

100,000 tokens cover all common words and parts of words

3

Universal Language

Same system works for English, code, emojis, and other languages

Fun Fact: GPT-4 has about 100,000 different tokens - like having 100,000 different LEGO pieces to build any sentence!

LLMs for Traders & Investors

Real-world applications in finance

Great For

  • Explaining financial concepts & terminology
  • Summarizing earnings reports & news
  • Analyzing historical patterns
  • Strategy backtesting ideas
  • Risk assessment education

Example Prompts

"Explain P/E ratio like I'm a beginner"

"What are the risks of options trading?"

"Summarize this earnings report"

"Compare value vs growth investing"

Not For

  • Real-time price predictions
  • Guaranteed trading signals
  • Personal financial advice
  • Live market data
  • Replacing due diligence

How a Trader Can Use LLMs

Ask Question

"What's a bull spread?"

LLM Processes

Recalls patterns from training

Get Explanation

Clear, detailed answer

Apply Knowledge

Make informed decisions

Remember These Key Points

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Pattern Matching

Not "thinking" - just really good at predicting text patterns

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Trained on Text

Learned from billions of web pages, books, and articles

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Probabilistic

Calculates most likely next word based on context

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It's a Tool

Augments human capability, doesn't replace judgment

Ready to Dive Deeper?

Start with the interactive lessons to master LLM concepts step by step