Dangers of Information overload and how to avoid it when you are trading

When you have to make important financial decisions, you will always want to get as much information as you can get. Insufficient information results in having an incomplete picture of what might happen in your investment or trade, and could lead you to make the wrong choices.

The flipside, however, is also not a good thing.

Having excessive information can be equally confounding, because it is difficult to know where to start reading and digesting the information. When faced with too much information, many end up feeling overwhelmed and unable to cope.

Why does information overload happen?

A study by professors Julie Agnew and Lisa Szykman, published in 2004, cited a number of reasons for information overload. They include the sheer quantity of information available, having too many options, or having options that are too similar to each other, and insufficient financial knowledge.

Professors Agnew and Szykman showed that people who had low financial knowledge were the most susceptible to information overload. As a result, these people would end up choosing their “default option”, the path of least resistance so to speak, or the easiest thing they were able to do without exploring the available options.

That means these investors were not actively selecting what was best for their interests. They could be investing in products that are unsuitable for their risk profile, not diversifying their investment sufficiently, closing their profitable trades prematurely, or hoarding cash instead of equity, just to cite some examples.

Suffice to say, simply providing investors with abundant information about their investment options is not enough to help investors make the right investment decisions.

A simple tool to manage information for traders

Trading Central – the global leaders in financial technology innovation – understood the problem of information overload and designed its TC Market Buzz AI Newsdesk specifically to counter it.

According to Trading Central, more than 92,000 new articles and over 2.5 quintillion bytes of new data gets added to the internet on a daily basis. Besides being nearly impossible to read all of it, much of it also contains conflicting perspectives and questionable credibility, which adds to the difficulty of using all that information to find actionable investment ideas.

To help investors make better investment decisions, TC Market Buzz sifts through thousands of news sites, blogs and social media channels, and provides an accurate and concise market view of a selected stock, currency pair or commodity. The information is displayed on a user-friendly, mobile-responsive platform that is also interactive and aesthetically pleasing to use.

Here’s what you can expect from TC Market Buzz.

Know what’s buzzing

The main landing page provides a full overview of all the financial instruments that are being discussed online, in “bubbles”. The larger the bubble, the more online buzz there is around it. This is where you can monitor any major spike in news over the past 24 hours.

You can hover over any bubble to see more details about the instrument and click to go to its research page (pictured above), which provides news metrics from price to coverage history, the most discussed topics, how negative or positive the coverage, and look through a curated news feed.

You can also narrow your search to what is most relevant or important to you, by selecting filters like sectors, countries and time frame. You can even overlay other insights like price trends.

Manage your portfolio

You will be able to build any number of watchlists to keep track of the instruments of interest.

You will also be able to explore the Newsdesk, with news from reliable sources.

TC Market Buzz now available in Singapore

Phillip Futures has made TC Market Buzz available to Singapore investors, for use on its Phillip MT5 platform. This is part of their continuous effort to provide traders with the best-in-class investment support.

To start using TC Market Buzz, you will need to open a MT5 account, and Phillip Futures is currently the only broker in Singapore to support the MT5 platform. Phillip Futures’ online account opening is paired with MyInfo so the entire form takes minutes to complete, and approval is just as efficient.

Steps to start using TC Market Buzz

Step 1

After you have opened your MT5 account, you can download the TC Market Buzz plugin file. Then double-click on the file to start the setup. Follow the simple wizard guide to complete the set up.

Step 2

Download the plugin file and double-click the file to execute it. A simple wizard guides you through the process in your language of choice.

Step 3

Locate the Trading Central Expert Advisor in your MetaTrader Expert Advisor list, then drag the indicator onto the chart. When a pop-up window appears, click on the Marketbuzz tab to get insights immediately.

Not sure how to start trading on Phillip MT5?

Phillip MT5 is also integrated with Trading Central indicators and the powerful Autochartist pattern recognition tool. You can request for the freeMT5 demo account here, to try out the platform for yourself.

At the same time, you could learn more about FX trading strategies, and the current market outlook by attending one of Phillip Futures’ free webinars. Get the latest schedule here.