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Turmsegler

15. What is the difference between data and information?

The system only receives five numbers per day for its analysis.

In order to obtain these numbers (data) at a guaranteed quality, many investors pay considerable sums to the stock markets and professional data providers such as Reuters or Primark/Thomson Financial. This data is obviously very significant. But why do traders, fund managers and analysts use a multitude of special applications in order to obtain a picture of the situation of the markets? For the simple reason that the data alone cannot provide insight into the matter. By means of analyses, however, one can examine the data and glean information from it. Thus - to use a trivial example - one can compare open and close in order to obtain the information as to whether the price of the security has risen or fallen over the course of the day. While the number (e.g. open) does not reveal anything by itself, the connection with other data yields information that can benefit the user in making a decision.

While a trivial comparison such as between the open and close of a day is still easy to handle mentally, most methods of analysis require the processing and consideration of such a large number of data points and at such precision that even a person of superior mathematical ability would have to give up without the help of suitable tools.

NeuroStrategy is an example of an application that scours large quantities of data for usable information (data mining), in order to be able to make appropriate strategic trading recommendations on the basis of the information thus obtained.