What is social data?

google_trends5In the lead up to the release of our first book, Intro to Social Data for Traders, we have been highlighting the ways that social data and stock prices are related. But what is social data, exactly?

Social data is term which encompasses multiple sources of information such as search queries, social networks, and financial prediction networks. This data reflects the collective actions of billions of human beings and can provide a fresh perspective on financial markets.

Search volume forms one of the foundational pillars of social data. With Google’s dominance in the global search market, it’s historical search volume provides a wealth of useful information. In the past we have sketched out ways you can use historical search time series to inform your trading decisions:

Social networks form the second pillar of social data, and we have seen how two popular social messaging networks can expand our perception of financial markets:

An emerging phenomenon, financial prediction networks form the third pillar of social data. Last week we saw how one such network, Estimize, could be used to visualize the structure of the stock market.

Traders and investors have always endeavored to incorporate the latest and most accurate information into their analyses. Incorporating social data is the natural evolution of the desire to have access to the best information.

Want to learn how to mine social data sources like Google Trends, StockTwits, Twitter, and Estimize? Make sure to download our book Intro to Social Data for Traders

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Lead image licensed under CC BY-SA  2.0 from WEF

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