By: Joshua Munson
Day Trading is a game of inches. Even the smallest changes in price action can lead to big gains and losses. Today, I am here to discuss how you, as a trader, can use google trends to help you day trade.
First, let’s explore what Google trends is. Google Trends is a website that allows you to track a multitude of search related statistics. The service has a multitude of applications from seeing what the hot search topics by category are, to seeing how much traffic the terms are getting at a particular time. Google trends will even show you the key words that people searched to land there.
As traders will learn over time, large increases and declines are caused by spikes in trading volume. This could have a positive or negative impact based on the sentiment of the most recent news.
Connecting the two together, you can use google trends to search for the stock ticker you follow. So, for example, say you are following General Motors. #GM
By using google trends, you would see a large spike in search volume when key information is released on google. Recently, GM announced a hefty layoff before earnings which sent their article to the top trending business article on google. You can read more about that from our previous article on the topic.
By using google trends, you can see large spikes in google search volume which indicate that some form of major news has broken on the stock that you are following. If you see an abnormal spike in search traffic, research where the traffic is going and if it is positive or negative sentiment.