Role of Big Data being felt more in finance and trading


Big data has its fingerprints on everything these days. It doesn’t matter what industry or business you’re looking at, it’s hard to separate major business decisions from big data. This is certainly true when it comes to finance and trading, where big data’s influence is being felt more and more each day.

Finance and trading have always relied on robust data and accurate inputs for successful decision making. But as we enter into 2017, it’s become quite clear that big data is revolutionizing finance and trading from the inside out.

Here are some specific topics that need to be discussed in more detail.

1. Technical Analysis

“Technical analysis is the study of prices and price behavior, using charts as the primary tool,” senior market strategist Jeffrey Friedman notes. “Modern-day technical analysis include such principles as the trending nature of prices, prices discounting all known information, moving averages, volume mirroring changes in price, and the identification of support and resistance levels.”

At the heart of any trading strategy is powerful technical analysis that maps out the most likely rate of return and probabilities that specific outcomes will occur. As big data has grown, the accuracy of technical analysis has increased. As a result, traders have found more consistency in their numbers – and therefore, they are able to mitigate risk.

However, we’re just now reaching a point where high-frequency trading (HFT) firms are joining the fold. As InformationWeek’s Greg MacSweeney admits, “The topic of big data in the trading business has often been met with jeers or snickers, since HFT players rely on microsecond latency and utilizing big data usually meant increasing processing time outside of acceptable metrics.”

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