The Importance of Good Information
The importance of where you get your information from cannot be overstated. For example, Fortune magazine ran a survey recently and found that half of all finance analysts had Apple’s target stock price under where it currently was, and they had Apple listed as either a buy or a strong buy. The only plausible reason why this could happen is that the analysts that had done this had not been keeping up with the stock often enough to keep their sites thoroughly updated.
This begs another question. Do you feel comfortable taking financial advice from a site that isn’t able to keep up with the market? You shouldn’t. In fact, you should be continuously trying to find accurate information that can be produced in a quick and easy to access manner. People make mistakes once in a while, but you don’t want to base a trading decision upon incorrect information. The better your information sources are, the better your decision making process will be when you are determining which trades you should and should not make. Flawed information will eventually lead to big losses, which is obviously a bad thing.
So, another question now pops up. How do you get good information? Or, perhaps a better version of this, how do you get information that will bring you higher profits?
First, find reputable sources. Look for straight financial news providers, and not things that are skewed by other businesses that have interests in the news that is being reported. Sometimes, the site or paper that you are getting your information from has something to gain by giving you data that is slightly off or somehow misleading in some other way.
Next, always be prepared to evaluate your own information with your own methods. For example, if an analyst site told you to buy Apple right now because they predict that the price will be going up to $115 in the next couple days, you can test this on your own and find out that it’s not good information and completely unreliable. Right now, Apple is up over $122, and thinking that it will go up to a number that is lower than its current price is ridiculous. For a short term binary options trader, this would be catastrophic. This is a simple example, of course, but it’s something that has been happening to countless people simply because they haven’t been thinking on their own and making their own trading or investing decisions. In this case, one minute of research could have prevented the problem.
Is it possible that Apple will still go up even if their numbers are wrong? Sure. Apple is doing well and is currently the most profitable company in the world. That is a strong indicator that there are still big things to come out of Apple and that you can still make a good profit off of it in the future. But, because the data on some sites is not right, there is more room for error. Maybe you won’t make a mistake with Apple, or the next company you trade based upon this type of information, but eventually, incorrect info will catch up to you and turn your lucky profits into sizeable losses. It defeats the point of trading altogether, and it is completely avoidable if you just spend a few minutes checking on your sources and evaluating themselves. It’s not a tough process once you know what you’re doing, and it doesn’t take long to learn, either. And in the end, the time you spend doing this will only lead to higher profits, and that’s never a bad thing.