Algorithm Trading with Google Trends Data

Abstract

Nowadays, with the development of social media search system When people want to make financial decisions, they tend to use online search engine like Google to find information. According to Herbert Simon [1], people search only for events related to themselves, so an increase in search volume can reflect the fact that the event has an impact on more and more people. I find that I can learn about the orientation of the public and their views on the same thing through Google trend, thus I can infer the impact on the stock market in advance. In this paper, I investigate to see how google trends can help the financial practitioner predict the changes in stock market.