Along with blockchain technology, the global big data market represents one of the fastest-growing entities of its type anywhere in the world.
In fact, this space is forecasted to grow to $103 billion by 2027, more than double its market size at the end of 2018. This growth will largely be driven by software innovations, which account for an estimated 45% of the overall industry.
There are also a huge number of potential applications for big data, including the vast and volatile forex market. But how exactly is big data reshaping the foreign exchange? Let’s take a look.
Big Data and Predictive Analytics in the Foreign Exchange
As forex trading cannot be described as any kind of ‘get rich quick’ scheme, it’s important for investors to seek out small and incremental gains rather than pursuing supposed shortcuts to success.
Big data and predictive analytics can certainly help traders on a fundamental level, as they enable them to make small and frequent scalping decisions that marginally boost the profitability of each individual trade.
In general terms, big data and the application of predictive analytics can minimise the learning curve associated with the forex market. Make no mistake; boasting a strong base of theoretical knowledge is crucial if you’re to succeed as a forex trader, but the gap between this and practical experience can be difficult for investors to bridge.
Now, whilst demo trading accounts can help to bridge this gap and allow investors to hone their various strategies, it can still be difficult to generate sustainable profits from currency without incurring occasional (and sometimes painful) losses.
The use of in-depth analytics can also help to minimise the threat of emotive trading, which can be extremely problematic in instances where you’ve incurred a streak of losses.
This is a crucial consideration, and one that can make a significant difference between profitable and unsuccessful traders.
The Last Word – How will Big Date Change Forex Trading?
From an infrastructure perspective, big data also places the onus on brokerage firms to meet the demands of regulators and invest more heavily in their infrastructures.
So, regardless of whether you’re a day-trader or like to generate forex profits through speculation and spread betting, you can benefit from superior online trading platforms that offer access to an even wider range of analytical tools.
Overall, this makes it far easier for even novice traders to identify trends and patterns, creating more opportunities to generate a sizeable and consistent profit over time.