Google Searches Drive Trading Decisions for UK Investors, Capital.com Study Finds
A recent study conducted by Capital.com, a high-growth global trading platform, has revealed an interesting correlation between Google search trends and the trading behavior of its UK clients. The study analyzed data from over 7,000 active UK traders in the first half of this year and found a strong link between Google search activity and the number of trades executed on the Capital.com platform.
One of the key findings of the study was that the most traded market on the Capital.com platform in the first half of this year, the Nasdaq, was also one of the most searched-for terms on Google over the same period. This indicates that UK traders are using Google searches as a decision-making tool when it comes to choosing which markets to trade and when to enter into a position.
Daniela Hathorn, Senior Market Analyst at Capital.com, commented on these findings, stating that traders are utilizing a variety of platforms, including Google search engines, to help inform their trading decisions. With the advent of mobile technology, 24-hour news channels, and easily accessible information on the internet, it has become easier than ever for traders to stay informed and trade the news.
The study found that spikes in Google search activity for terms such as ‘Nasdaq’, ‘Gold’, and ‘Tesla’ directly corresponded with a substantial rise in the number of trades executed on the Capital.com platform. For example, on the day Tesla announced plans to recall 362,000 US vehicles due to safety concerns, trading of Tesla on the Capital.com platform saw a 37% jump in a single day. On that same day, Google searches for ‘Tesla’ also spiked in popularity.
Hathorn explained that regardless of whether the news surrounding a company like Tesla is positive or negative, traders expect it to be in the news. This increased news coverage leads to more price action and potentially more trading opportunities, which may explain why Tesla remains the most popular stock to trade on the platform.
In addition to Tesla, trading activity across the Nasdaq also experienced a significant increase in correlation with Google search activity. The Nasdaq, being the most traded market on the Capital.com platform in the first half of the year, saw a 60% jump in trading activity on a day when Google searches for ‘Nasdaq’ reached their highest peak.
The study also found a similar pattern with Gold markets. Trading activity in Gold markets peaked by over 90% in mid-May, coinciding with heavy Google search activity for ‘Gold’ during the same period. Hathorn noted that Gold saw increased interest towards the end of 2022 due to market anticipation of a recession in the new year. Despite the economy being more resilient than expected, there were several high-impact events that shocked the markets, such as the banking crisis in the US, drop in consumer prices, and expectations for the end of Fed tightening.
Capital.com has responded to its clients’ preference for free and easily accessible news and information by providing personalized watchlists, educational resources, financial news feeds, and alerts. These features allow clients to trade directly from a news article or watchlist, saving them valuable time.
The findings of this study highlight the growing influence of the news cycle on trading decisions among UK traders. With the availability of real-time information through platforms like Google, traders are increasingly relying on these sources to inform their investment strategies and capitalize on market movements.
In conclusion, the study conducted by Capital.com indicates a strong correlation between Google search activity and the trading behavior of UK investors. Traders are utilizing a multitude of platforms, including Google search engines, to make informed decisions about which markets to trade and when to enter into positions. The availability of mobile technology and 24-hour news channels has made it easier than ever for traders to stay informed and trade the news. As a result, the news cycle continues to have a significant impact on popular trading decisions among UK traders.
