The wide adoption of big data has completely changed many different industries and sectors. And perhaps the ones that have seen the biggest transformation of them all, thanks to data analytics, is the stock market.
The stock market is all about being one step ahead and gaining a competitive advantage on your rivals. And that is what data analytics provides. The financial services have adopted data analytics widely, and it helps traders make better and more efficient investment decisions.
Along with that, the rapid fluctuations we see in the trading landscape, it is almost necessary for investors to somehow get quick and easy access to the data.
In the past, we used to rely on our intuition and limited mathematical skills to form our investment decisions. Now, computers do this very quickly for us. They do this on a much bigger scale, with much more data, and provide more accurate results. No wonder data analytics has really taken off in the stock market, among other industries.
Let us now look at exactly how data analytics has changed stock market trading:
Leveling the playing field
The stock market, right now, is all about machine learning and implementing algorithmic trading. What this means is that, with the right inputs, and with an apt setup in place, machine learning gives computers the power to arrive at conclusions and make decisions that humans would usually make. This includes decisions to invest or sell stock, and is done at a very fast pace by ML algorithms. With such advanced data analytics involved, the investment power of the average individual as well as big firms has increased significantly.
To determine outcomes and returns on investment
The way the prices in the stock market depend on a lot of varying factors- political situations, social trends, and prices of commodities. As we collect more and more data about such aspects, we move closer and closer to making much more precise predictions on real-world stock prices and investment decisions.
Deploy accurate perceptions using Machine Learning
The full power of machine learning hasn’t come anywhere close to being realized as of yet. If implemented properly, ML will help computers to arrive at precise decisions based on new information, while incorporating past human mistakes. The possibilities of ML are ridiculously vast and you can learn more about them here.