Data driven means that your decision are driven by data and not by emotions. This approach can be very useful in stock market investment. Here is a summary of a data driven approach which I have been taking recently

Stop analysing stock by stock

Being a data scientist, the one thing which I do not like about existing stock market tools is that the analysis is done in a very crude way. The analysis has still to be done for each stock symbol. Something like this

Choose a stock, Analyse it, decide on buy/sell

Go to second stock, Analyse it, decide on buy/sell

Go to third stock, Analyse it, decide on buy/sell

etc…

Analysing stock by stock — a very cumbersome way

This forces you to choose stock in first place. And the way you choose the stock is based on intuition or news you read about the stock. So there is already some bias introduced in the selection process.

The approach which I am using is top-down. Take all possible stocks and then analyse all together

Data driven approach — Analyse all stocks in one go

This way I do not have to think of selection of a particular stock in one place. I just take all stock symbols and analyse all together. Shown here is analysing all stock of CAC40 (French Stock Market)

What I get is graph of all stocks together.

All stocks are shown together

This saves me immense amount of time. Earlier I used to spent hours to get the visualisation for 40 stocks. Now I can get visualisation for 40 stocks in matter of seconds

#data-science #trading #stock-market #investment #data-driven-investor