Archive for the ‘Science’ Category
Traders and investors have been dreaming of predicting the markets since the beginning of formation of trading markets. How nice will it be to know exactly how the market is going to move tomorrow, next week, next month. In fact, the whole concept of Technical Analysis is to analyze the chart representing human behaviour and predict the future movements.
Now it maybe more possible than ever, as reported in New York Times. Being able to crunch what is called big data gives someone a huge advantage. Wall Street, quant traders and hedge fund have been exploring this for years. Data includes news, commentaries, blog posts, social networking sites and tweets (on Twitter). Analysis includes which market or counter is commented upon, adjectives used, words representing sentiments, even emoticons!
There are no lack of mainstream users of this form of market analysis. Alpha Equity Management, a $185 million equities fund in Hartford, uses Thomson Reuters software to measure sentiment over weeks and pumps that information directly into his fund’s trading systems. Bloomberg monitors news articles and Twitter feeds and alerts its customers if a lot of people are suddenly sending Twitter messages about, say, I.B.M.