The world of online trading has been growing year on year, and it now offers traders/investors the ability to invest in almost any global market of their choosing. As such, the technology surrounding trading and investment is constantly being developed and improved to help traders with investment decisions. A good way to stay on track with investment trends is to utilize the help of investment specialists like thoses at Colorado Capital Managment.
In recent years, there have been significant developments in big data technology, which is designed to handle huge data sets with ease. Here are some of the ways this technology is impacting investments and trading in general.
Analysis
Investors are constantly analyzing data from the markets they invest in, in order to make informed investment decisions and to get a clear picture of how markets may behave in the future. Given that most markets are in a constant state of flux, the amount of data which they are presented with is often large, sometimes making it difficult to accurately analyze and use.
It is fair to say that big data technology is changing the game in this respect, as it has the potential to recognize trends in large data sets and present them to investors, who can then analyze them with greater ease.
Strategies
With the ability to make sense of large data sets with greater ease, traders can build much more informed strategies, which may lead to bigger returns on their investments in the future. These strategies will likely be able to take into account far more complex trends, which were previously very difficult to detect (especially in the narrow times frames which traders work to).
With more developed strategies being introduced to traders and investors around the world, investment patterns and attitudes may well change significantly (depending on how much big data technology is used in trading).
Financial Advisors
It is worth noting that financial advisors and wealth management firms are also discovering the benefits of big data technology as well as artificial intelligence. With the ability to glean more accurate information from complex data, they can potentially make better predictions about the behavior and ROI of different global markets.
They may, for instance, be able to better inform their clients about cryptocurrency movements, and potentially make long term predictions about their values (currently very difficult given its volatility).
Big data technology is certainly something which all investors should keep an eye on. It has the potential to vastly improve the current investment/analysis tools which traders currently use, and is likely to benefit all traders in the near future.
New opportunities
Tunnel vision is a serious problem for many investors. Most people focus on traditional investments. When they invest in equities and debt, they also typically focus on investing in companies that have proven track records.
This can be a major mistake, because markets for the securities are usually very efficient. This means that it is very difficult to find stocks or bonds in Fortune 500 companies that are undervalued. If you want to find winning securities to invest in, you are going to need to look for ones that don’t have as much attention.
Big data makes it much easier to identify these types of investments. You can look at publicly available securities data on companies of all sizes all over the world. This will help you identify undervalued investments by screening companies with a low return on equity and other important financial variables.
Pulling your money from losing markets before they collapse
Hindsight is always 20/20. Most people want to think that they could have predicted a major market correction, such as the stock market crash in 2008. Unfortunately, spotting red flags that will alert you to a collapsing market can be very difficult. The good news is that big data can make things a lot easier. You can tap into publicly available financial data with Hadoop tools and use predictive analytics algorithms to identify the risks of a major market correction.
Conclusion
Investing for the future is not easy for many people. Fortunately, big data has made the process much easier. It is making the markets more efficient, but also creates a lot of opportunities in foreign markets, bitcoin trading, Forex and other trading opportunities.