“Dow drops more than 350…” stated Yahoo Finance on Friday Dec 18, 2015. Eye catching? Yes. Dramatic? Most definitely. Useful financial market or trading information? Possibly. While this article contains much more detail and useful information for traders and investors. Readers today quite often stop at the headline – missing out on useful and actionable trading information.
One of the many roles of a journalist is to write headlines that inspire the reader to read the article in detail. With the 24 hour global markets and 24 hour global news cycle that is normal today and our limited amount of time, quite often as readers we stop at the headline. We read the headline above and know that the market is down; however, only if we are embedded in the stock market daily do we know that 350 points is a small percentage change for the DJIA. Another task of the journalist is to illicit emotion in the reader. As traders and investors know – emotions in the stock market must be contained, reduced and when possible eliminated. This management of emotion in the investment selection, trading and risk management stages is done by using data. Quantified numeric data – by using this form of data market, participants are able to measure an equity or stock against other equities or even itself at different time periods with a normalized, repeatable and non-emotional process.