Quantifying Trading Behavior in Financial Markets Using Google Trends

Scientific Reports, Vol. 3, pp. 1684; DOI:10.1038/srep01684 (2013)

6 Pages Posted: 4 May 2013

See all articles by Tobias Preis

Tobias Preis

Data Science Lab, Behavioural Science, Warwick Business School; The Alan Turing Institute

Helen Susannah Moat

University College London - Department of Civil, Environmental and Geomatic Engineering; Boston University - Center for Polymer Studies

H. Eugene Stanley

Boston University - Center for Polymer Studies

Date Written: April 25, 2013

Abstract

Crises in financial markets affect humans worldwide. Detailed market data on trading decisions reflect some of the complex human behavior that has led to these crises. We suggest that massive new data sources resulting from human interaction with the Internet may offer a new perspective on the behavior of market participants in periods of large market movements. By analyzing changes in Google query volumes for search terms related to finance, we find patterns that may be interpreted as ‘‘early warning signs’’ of stock market moves. Our results illustrate the potential that combining extensive behavioral data sets offers for a better understanding of collective human behavior.

Keywords: Big Data, Financial Markets, Predictive Analytics, Search Volume, Data Mining, Google, Computational Social Science, Digital Traces, Dow Jones Industrial Average

JEL Classification: A10, B40, C10, C20, C22, C53, C90, D70, D79, D83, J10, J11, O40, O47

Suggested Citation

Preis, Tobias and Moat, Helen Susannah and Stanley, H. Eugene, Quantifying Trading Behavior in Financial Markets Using Google Trends (April 25, 2013). Scientific Reports, Vol. 3, pp. 1684; DOI:10.1038/srep01684 (2013). Available at SSRN: https://ssrn.com/abstract=2260189

Tobias Preis (Contact Author)

Data Science Lab, Behavioural Science, Warwick Business School ( email )

University of Warwick
Coventry, CV4 7AL
United Kingdom

HOME PAGE: http://www.tobiaspreis.com

The Alan Turing Institute ( email )

British Library, 96 Euston Road
London, NW12DB
United Kingdom

HOME PAGE: http://https://www.turing.ac.uk

Helen Susannah Moat

University College London - Department of Civil, Environmental and Geomatic Engineering ( email )

Gower Street
London, WC1E 6BT
United Kingdom

HOME PAGE: http://www.suzymoat.co.uk

Boston University - Center for Polymer Studies ( email )

590 Commonwealth Avenue
Boston, MA 02215
United States

H. Eugene Stanley

Boston University - Center for Polymer Studies ( email )

Boston, MA 02215
United States

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