Every trader learns pretty quickly that emotions and knee-jerk reactions can spell disaster in the financial markets. They work to fine-tune trading strategies and use the best possible charting tools and technical indicators to identify trading opportunities. Making informed decisions is so important that there are hundreds of idioms and proverbs doing the rounds among traders. From “buy low, sell high” to “don’t fall in love with your position,” and even “the trend is your friend,” are often quoted while educating new traders.
So, how do traders make informed decisions? And how can you, their broker, aid this process to best support your clients? When you help your clients with just what they need for trading decisions, you stand a better chance of not just retaining clients but encouraging them to make repeat deposits. So, here’s what you need to know about how trading decisions are made and how to provide the right support.
How Traders Make Decisions
The first step is extensive research. For this, traders follow the news, keep an eye on the economic calendar and corporate calendars and read market analyses and opinions of experts. Economic and geopolitical happenings around the world move the markets and lead to shifts in asset price trends. Unless traders stay abreast of the latest occurrences, they might miss out on trading opportunities.
With the foundation of the latest market news and information, traders then go on to pick the best time to enter and exit the market. This is where all those technical analysis and charting tools offered by the best trading platforms come in handy. Backtesting trading strategies, fine-tuning EA parameters, identifying stop loss and take profit levels can all be done with these trading tools.
Smart trading tools can help traders optimise their trading strategy, identify or anticipate market trends and determine the entry and exit price levels. A combination of access to market news and sentiment and powerful trading tools can be invaluable in anticipating even the smallest shifts in market trends. This can then maximise the chances of success for traders.
Another thing that traders learn fairly quickly in their careers is to diversify their portfolios. This means they want access to not just multiple tradable instruments but also asset classes. While forex might continue to be one of the most popular markets for retail traders, the availability of CFDs and fractional shares is helping drive the popularity of the stock markets, including index trading. CFDs also ease commodities trading, since traders no longer need to take physical possession of gold, coffee or soybeans.
But with this, traders now want access to market news and analysis across these numerous instruments and asset classes. The process of making informed decisions remains the same, regardless of whether equity, commodities or forex is being traded – real-time news and technical analysis.
How Can Brokers Support Trading Decisions?
Most brokers today already offer their clients the best trading platforms, loaded with powerful technical analysis tools and charting capabilities, EAs and multi-asset access from a single place. We’re also sure that you provide educational resources. But if you really want to differentiate yourself from the competition, you need to provide something extra. This is where access to news sentiment and volume data can prove indispensable.
News impacts market sentiment, which, in turn, leads to buying or selling pressure for an asset. So, news sentiment can be a powerful way to generate trading ideas, which can then be confirmed through fundamental and technical analysis. Sentiment data, when represented visually, can immediately offer insights into the market mood, which traders can use to anticipate market behaviour.
When this sentiment analysis is combined with news volume data, traders can predict market volatility. The greater the news volume for a specific asset, the greater the price volatility of that asset tends to be. Armed with volatility metrics, traders can be better prepared to time their entry and exit, while also being able to identify unique trading opportunities.
How to Provide News Sentiment Analysis?
Now, you might think that scouring the internet for news to find the most relevant ones for your clients is a herculean task. Well, it is. This is why Acuity has built unique technology that combines the power of AI and Natural Language Processing (NLP) to manage infobesity and bring real-time insights.
Our technology cuts through the noise of global news, commentary and analysis to discover valuable information from millions of news items and data sets online. This information is then converted into easy-to-understand visual formats, which you can present to your traders to power their trading decisions.
Brokers no longer need to hire expensive in-house teams of analysts to provide market insights. AI aggregates, analyses and visualises global news, in real-time and at scale, to detect even the subtlest patterns that might be emerging. This gives your traders an edge.
With Acuity’s technology solution, which easily integrates with your trading platforms, you can offer forward-looking analysis, 24/7 access to global news and commentary, and visualisation of analyses across multiple assets.
Are you ready to set your brokerage ahead of the curve by arming your clients with actionable trading tools? Contact us to learn more.