How social media sentiment can affect markets – INO.com

How social media sentiment can affect markets – INO.com

On a daily basis over 140 million users of micro-blogging service – Twitter are generating a collective 340 million small text messages. This abundance of data contains a multitude of patterns hidden within. But can this data predict whether the stocks go up or down? Can it really assist traders on making calculated, informed and successful trades?

I think it is a fact that the media, both online and offline are able to influence the financial market and generate both positive and negative outcomes on market price. It is also said that investors are not the only subject to the sentiment of related news articles but also the public opinions.

The challenge is how to quantify such sentimental information to predict the movement of the stock markets, so say the researchers who mined the twitter data anyway.

In other words, the most important problem in modern finance is finding efficient ways to summarize and visualize the stock market data to give individuals (e.g. the traders) useful information about the stock market behaviour for investment decisions. Trading with a knowledgeable broker such as Magnum Options who has professional traders training customers, and are involved in these types of sentimental arenas and trade themselves – is an effective way of both learning this information, processing it, and gaining access to it through a reliable source.

Data mining

Data mining is the science and technology of exploring data in order to discover certain unknown patterns. This is part of the so-called Knowledge Discovery in Databases (KDD). In today’s computer driven world these databases contain massive quantities of information regarding whatever topic you can think of case of our subject Twitter. The hard thing is to extract the required information from this data punch.

The research conducts the following data mining systems:

  1. Application of decision tree in stock market
  2. Application of Neural network in stock market
  3. Application of clustering in stock market
  4. Application of associating rules in stock market
  5. Application of factor analysis in stock market
  6. Application of time series in stock market

Not only do we want to predict the stock market using this information, also a timeframe should be applied to that information. A trader should be able to benefit from very subtle patterns with a short life time, and incorporate the impact of market players on market regularities.

Conclusion

There is a critical need for automated approaches to effective and efficient use of financial data to support companies and individual traders in strategic planning and making investment decisions.

One question remains:

If we could predict the financial market. Will there still be a financial market? When all traders will know what the markets will do, what benefit would there still be? And, maybe even more importantly, will trading still be fun and exciting?

To find out the answer to these questions, how to combat these potential negative outcomes and use the research systems explained in order to create profitably trading opportunities – open an account today at Magnum Options and benefit from their unique and free 1 on 1 training sessions with expert trading professionals.

Magnum Options is a broker platform that seems to have mastered the brokering world of Binary Options. Established in early 2013, Magnum Options uses the latest technology for Binary Options traders. The broker is privately owned by investors with many years of experience in the online trading industry. The day to day management is handled by a team of experienced online trading professionals who have all been in the position of their users, and really understand the needs and priorities of both novice and experienced traders. These professionals have assembled an educational team like no other that really focus on informing and educating all traders interested in trading binary options. Because of their expertise in the financial trading industry, Magnum Options has a very unique and refreshing approach to education, teaching people not only how to trade using a binary options account, but also how to use binary options with other trading methods to maximize profits.

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How social media sentiment can affect markets – INO.com

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