Here’s a hard truth: trading, in our view, represents one of the most challenging activities in the financial sector. Initially, the uninitiated among us may view trading as a straightforward path to wealth. But while the mechanics of placing trades might seem simple, the reality is that trading is hard in ways that most never anticipate. Why is trading hard? Here, we lay down the reasons warts and all in this article:
Why is trading hard? The information overload challenge
In stark contrast to popular belief, trading isn’t just about following price charts. So what is it actually about then? Each day, traders must process information from a seemingly endless number of news sources. To put this in context, our Trading Co-Pilot processes over 120,000 sources, across 20,000 news articles EVERY HOUR – something that only a team of analysts working 24/7 could possibly dream of achieving. The crisis in information management means that answering the question “why is trading hard” starts with understanding this overwhelming data deluge and the challenges it presents.
Why is trading hard: Real-time complexity
All of which suggests a deeper challenge: at any given moment, there could be in the region of 20-50 significant events affecting an asset’s price. As with most things in markets, context is crucial. For example, interpreting whether geopolitical events like Israel’s response to Iran will impact Crude prices requires deep understanding of multiple factors. This method applies across all asset classes, demonstrating why trading is hard even for seasoned professionals.
Why is trading hard: The human element
And so then, what about a trader’s potential to beat the market? Here’s another inconvenient truth – the majority of traders fail to outperform market indices. Much of that is due to the cognitive demands of processing vast quantities of information while managing emotional responses to market movements. This isn’t just because of psychological factors – it’s the same story on dealing with conflicting data points and market narratives.
The data processing paradox
The loss of trust in traditional trading methods isn’t surprising when you consider the scale of modern market complexity. Today, even the most experienced traders can face what we call the “analysis paralysis paradox” – where more information often leads to poorer decision-making. You get a sense that something’s fundamentally broken when entire teams of analysts and economists struggle to process market events effectively.
As with most things in trading, the solution isn’t necessarily more data – it’s better data processing. What we’ve found is that successful traders don’t just need access to information; they need intelligent systems that can contextualise and prioritise it. This means understanding which 20-50 events truly matter among the thousands that don’t and are just noise, all in real-time.
Beyond traditional analysis
Just as notably, the evolving nature of market dynamics has transformed what effective trading looks like. Initially, technical and fundamental analysis seemed sufficient. But look how markets have changed – in this scenario of interconnected global events, traditional approaches often fall short. For now, the most successful traders are those who can harness both human insight and technological capabilities. The concern for people relying solely on conventional methods is that they’re fighting yesterday’s battles with outdated tools.
All of these points highlight why modern trading requires a fundamentally different approach. That sounds daunting, but it’s precisely why we’ve developed our Trading Co-Pilot to bridge this gap, transforming vast datasets into actionable insights. These remarkable patterns we’ve observed in successful trading operations all point to one conclusion: the future belongs to those who can effectively combine human expertise with AI-powered analysis.
The solution
And so, despite this complexity, there’s hope. The keys to managing these challenges lie in combining human expertise with advanced technology. And yet perhaps the most exciting development is how AI can now surface critical events as they happen, providing contextual insights into potential price impacts. What we’ve found is that unlocking the potential means leveraging AI to process billions of historical events and real-time data points. The result of this is our Trading Co-Pilot which scans:
- 120,000 sources daily
- 1.2 billion historical events
- 10 years of complete news archives
As long as we rely on human analysis alone, the fundamental reasons why trading is hard will persist. Which brings us the solution: our Trading Co-Pilot, which provides comprehensive, real-time market analysis through an intuitive interface, transforming complex data into actionable insights. The loss of trust in traditional analysis methods has created an opportunity for innovation. As markets grow more complex, the question isn’t whether to embrace AI-powered solutions – it’s how quickly you can integrate them into your trading strategy.
Want to transform your trading process? Discover how our AI-powered Trading Co-Pilot and newly release API for commodities trading can help you navigate market complexity with confidence:
- Email enquiries@permutable.ai for immediate access
- Complete the form below for a personalised demo
- Experience the power of real-time, contextual market insights
