BIG DATA SMALL WORLD

I am a bit of a scatterbrain; focusing on one thing at a time becomes boring to me and I get stuck in a rut, where I simply cannot produce anything, in contrast when I am jumping back and forth between five projects at a time I tend to accomplish more. Now I am telling you this only because I know that when I read a catchy title I am drawn instantly to read the contents of whatever media this title is attached to, however when I notice it’s an opinion piece, and I am unfamiliar with the person behind the critique I can lose interest pretty fast. In short…please read on.

In this world we live in, privacy has become nearly obsolete. With everyone’s lives interlinked to one another through connected media the world has been pushed into an ultra level of cyber globalization. This connectivity along with the financial tech revolution we experienced in the 80’s, 90’s, and 2000’s, means that data, that used to take days and weeks to penetrate the masses now reach millions of people in minutes, sometimes even seconds. This ability to price in not only macro but micro catalysts throughout the globe has created a very unique marketplace, one that up until recently hadn’t yet existed. Something I like to call ‘The Twitter ‘Effect’.

In the industry, and around the forums and blogs of the retail FX crowd, the term ‘priced in’ is used frequently to describe the overall market effect of a coming or recently released news event. Saying something is priced in essentially means that the market has already moved as if the news was out, usually due to a large consensus on what the news will be. Now how many ‘priced in’ pieces of news do you think were being talked about when traders had to use end of day charts and protractors to plot their support and resistance lines, while calling in pending orders based on rates that were possibly hours old? My guess would be… not many. Our connected society has changed trading and has changed it drastically. While high frequency trading technology has given large institutional buy and sell firms an upper hand in market making people tend to overlook ‘The Twitter Effect’ and how it has begun to level the playing field and tilt the advantage back toward the little guys.

It used to be, and when I say ‘it used to be’ I am not talking about your granddad’s ‘in my day’ era when he had to walk 45 miles to school, with no shoes, in a snowstorm, in July, I am talking about just 15 or 20 years ago, when the banks and institutional players had a monopoly on information. It is, after all, information that drives the market, whether that be electronic information, word of mouth, rumors, big data, small data, or shared analysis, information is key. With the explosion of social media in the last 10 years’ people are finally starting to actually use this medium for something other than wasting their days commenting on the comments that people they don’t know comment on while they were busy commenting… and taking selfies. The revolution is beginning, and as the masses are always quicker to adapt to new, out of the box, technologies than say large corporate entities, the window to take advantage of this is now.

Social trading, while not new, is still not what it should be and what it will be if the right people put their minds together to make it happen. When I say social trading I am not referring to solely copying other trader’s trades over some platform, I mean a truly social experience which allows users to connect, share, and react together to market changes, in the end perhaps actually becoming the catalyst for a market change.

In 2012 a company by the name of Derwent Capital Markets, created the world’s first hedge fund that traded based on analysis pulled from twitter. Granted the fund went offline about a year later, but not because it failed, because it did so well and the company saw such potential it pulled it in order to repackage it and sell it as a portfolio management tool. Big data meets social media, and it’s a match made in cyber heaven.

So, if you are tech savvy, and the terms data repository, responsive algorithms, gamification, and predictive analytics get you all warm and fuzzy inside, man up, it’s time to do your part in changing this industry for the better.

Seriously, send me an email… let’s talk….