Cookies help us display personalized product recommendations and ensure you have great shopping experience.

By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
SmartData CollectiveSmartData Collective
  • Analytics
    AnalyticsShow More
    sales and data analytics
    How Data Analytics Improves Lead Management and Sales Results
    9 Min Read
    data analytics and truck accident claims
    How Data Analytics Reduces Truck Accidents and Speeds Up Claims
    7 Min Read
    predictive analytics for interior designers
    Interior Designers Boost Profits with Predictive Analytics
    8 Min Read
    image fx (67)
    Improving LinkedIn Ad Strategies with Data Analytics
    9 Min Read
    big data and remote work
    Data Helps Speech-Language Pathologists Deliver Better Results
    6 Min Read
  • Big Data
  • BI
  • Exclusive
  • IT
  • Marketing
  • Software
Search
© 2008-25 SmartData Collective. All Rights Reserved.
Reading: 5 Amazing Ways to Use Data Analytics to Become A Profitable Trader
Share
Notification
Font ResizerAa
SmartData CollectiveSmartData Collective
Font ResizerAa
Search
  • About
  • Help
  • Privacy
Follow US
© 2008-23 SmartData Collective. All Rights Reserved.
SmartData Collective > Big Data > 5 Amazing Ways to Use Data Analytics to Become A Profitable Trader
Big DataExclusive

5 Amazing Ways to Use Data Analytics to Become A Profitable Trader

You should understand the role of data analytics in stock trading and other financial markets.

Sean Parker
Sean Parker
9 Min Read
big data with stock investing
Shutterstock Photo License -By Bro Crock
SHARE

Big data has had a tremendous impact on the financial industry. One of the biggest financial applications of new data technology involves stock trading.

Contents
How Can Data Analytics Assist with Stock Trading1. Do your research with analytics tools2. Understand the risk with predictive analytics risk scoring algorithms3. Trade within your means by using analytics budgeting tools4. Follow your trading plan with machine learning5. Have patienceUse Big Data to Secure an Edge as a Trader

You can significantly increase the profitability of your trades by investing in top-of-the-line analytics technology.

How Can Data Analytics Assist with Stock Trading

Trading is an interesting and exciting endeavor, offering the best excuse to engage with the markets in a meaningful way. It is going to be a lot easier to trade effectively with new data analytics tools.

However, while there are lots of reasons people decide to become traders, the most common incentive by far is money. There’s nothing wrong with trading to boost your income, but you’re sorely mistaken if you think it’s a way to get rich quick. Truly profitable traders know it doesn’t work like that at all. Thy have to take advantage of the latest big data technology to have a competitive edge in this convoluted market.

More Read

marketing data analytics
How Understanding Data Can Improve Your Marketing Efforts
CEOs: Hold Your Team Accountable for Data Analysis
Getting Serious About Big Data Security
How Mobile eCommerce Experience Can Improve with Big Data
Using Cell Phone Data for Social Good

Many beginners buy into the fake success stories on social media (there are countless images of amateur traders in designer clothes and sports cars, insisting their trades made them overnight millionaires). Yet in the vast majority of cases, these claims simply aren’t true. The reality is that successful traders need to make shrewd, informed decisions in order to build profitability over time. No fads, no gimmicks — just hard work and thoughtful actions.

If you want to increase the chance of you seeing returns, try using these five data analytics applications to outperform the market.

1. Do your research with analytics tools

This is arguably the most important use of big data for traders. You need to make informed trades, which is a lot easier if you have access to big data tools.

Traders typically perform best when they focus on a single market, rather than trying to keep track of several simultaneously. Some of the most popular markets to trade on include stocks, foreign exchange (aka forex), commodities and indices. The market you specialize in should very much depend on your own interests, as well as your financial position, your attitude to risk, the hours you plan to spend trading, and various other factors.

Once you’ve picked one, put all your energy into learning as much as you can about it. Plenty of helpful resources can be found online. There are accredited courses to enroll onto, or you can go for a self-taught approach by watching YouTube videos, listening to podcasts and learning through websites. However, do be cautious — there are plenty of trading scammers posing as educators. The Commodity Futures Trading Commission in the US has even explicitly warned the public to “watch for unregistered brokers and advisers, as well as fake testimonials and so-called trading experts on social media platforms” which lure people into schemes.

2. Understand the risk with predictive analytics risk scoring algorithms

You should also use predictive analytics for risk management. You can assess your long-term ROI targets and the risk associated with a trade by running complex, analytics-driven calculations.

Don’t get into trading if you can’t bear the thought of losing money. Even the most successful traders experience losses, and that’s okay. The aim is simply to make more profits than losses in the long-run. That said, it’s absolutely crucial that you always understand the risks of a trade before committing. If not, you could stand to lose a lot more than you think.

Education is hugely important because you must be able to make sense of all the figures, terminology and possible outcomes to really grasp how risky a trade is. The financial instruments you’re trading could also make a difference. For instance, many beginner traders will have heard of contract for difference (CFD) trading and could be drawn to it due to this perceived familiarity. However, as regulated trading platform Trade Nation notes, CFD trading is extremely complicated compared to something like spread trading, where “you can trade in the currency of your choice and also choose exactly how much you want to stake per point, giving you total control over how much you want to trade”.

3. Trade within your means by using analytics budgeting tools

Analytics tools are also great for helping you budget your money more effectively. We previously talked about the benefits of using big data to create a budget. However, it is also beneficial to use analytics to budget money for your trades.

The number one rule of trading is to only trade what you can afford to lose. This is a high-stakes activity which can be incredibly emotional as a result. Staying calm and objective is key to success as this is what will stop you from making rash decisions and risking money you definitely shouldn’t be. Losses are to be expected, and trading within your means will minimize the potential financial repercussions.

This is particularly important if you are trading with leverage, where you only need a small percentage of the amount you want to trade in your account. Though this can be an efficient use of your capital, leverage also means that profits — and more importantly, losses — will be greatly magnified compared to the money you put up. Therefore, this is something you have to be aware of in order to know and stick to your limits.

4. Follow your trading plan with machine learning

Profitable traders will create a trading plan and follow it no matter what. Machine learning tools can make it a lot easier. You can use the latest machine learning algorithms to manage your trades more successfully.

This puts your personal trading approach down on paper in line with your unique style, risk level and goals. For this reason, you should never use someone else’s plan, no matter how successful they have been.

Setting clear entry and exit rules is vital, as is recording the details of your trades so you can work out why you won or lost and analyze your performance. Remember that if you don’t stick to your trading plan, you won’t know whether it’s working. And once you know it’s failing, then you can learn what works and modify it accordingly. You may also want to update your plan as your skill level improves and when market conditions change.

5. Have patience

Trading is a marathon, not a sprint. You’re not going to be a pro straight away and you’ll constantly be learning and improving as you embark on your journey. That means if you experience a string of losses or realize there are still significant gaps in your knowledge, don’t give up. Persevere and have patience.

Trading certainly isn’t easy. It takes a lot of dedication and you need to spend significant time broadening your knowledge, immersing yourself in trends and techniques, and watching and gathering insights into the markets. Without this commitment, the chances of you becoming a profitable trader are slim. But if you’re willing to work hard, follow your trading plan and learn from your mistakes, you’re on track to become a better trader and, hopefully, you’ll start to see profits more often than not.

Use Big Data to Secure an Edge as a Trader

There are a lot of ways that big data can help you in the field of finance. One benefit is by using data analytics to trade stocks a lot more effectively.

TAGGED:big data in financebig data investingdata analytics in financedata analytics in stock trading
Share This Article
Facebook Pinterest LinkedIn
Share
BySean Parker
Sean Parker is an entrepreneur and content marketer with over 5 years of experience in SEO, Creative Writing and Digital Marketing with Rank Media. He has worked with several clients from all over the globe to offer his services in various domains with a proven track record of success.

Follow us on Facebook

Latest News

sales and data analytics
How Data Analytics Improves Lead Management and Sales Results
Analytics Big Data Exclusive
ai in marketing
How AI and Smart Platforms Improve Email Marketing
Artificial Intelligence Exclusive Marketing
AI Document Verification for Legal Firms: Importance & Top Tools
AI Document Verification for Legal Firms: Importance & Top Tools
Artificial Intelligence Exclusive
AI supply chain
AI Tools Are Strengthening Global Supply Chains
Artificial Intelligence Exclusive

Stay Connected

1.2kFollowersLike
33.7kFollowersFollow
222FollowersPin

You Might also Like

predictive analytics and cryptocurrency trading
Blockchain

Can Predictive Analytics Identify Future Crypto Profitability?

10 Min Read
data analytics in strategic financial planning
Analytics

The Evolving Role of Analytics in Strategic Financial Management

6 Min Read
big data trends in small business lending
Big Data

Massive Data-Driven Trends Impacting Small Business Lending

6 Min Read
big data investment growth
Big DataExclusive

Investing for Income vs Investing for Growth with Big Data

5 Min Read

SmartData Collective is one of the largest & trusted community covering technical content about Big Data, BI, Cloud, Analytics, Artificial Intelligence, IoT & more.

giveaway chatbots
How To Get An Award Winning Giveaway Bot
Big Data Chatbots Exclusive
data-driven web design
5 Great Tips for Using Data Analytics for Website UX
Big Data

Quick Link

  • About
  • Contact
  • Privacy
Follow US
© 2008-25 SmartData Collective. All Rights Reserved.
Go to mobile version
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?