Bad data viz in finance

Oracle of · Nada
Aug 25, 2018 6 Comments

Why are financial charts always so badly made? I guess it fits the culture that everything is exagerated, but what use can anyone looking at price charts possibly have for a graph where a five point gap looks like the next recession? See this everywhere from the media (Bloomberg, MarketWatch, etc), to online chart defaults (Google, Yahoo), to actual reports, and even to academic publications. Wtf? Is there an industry wide conspiracy to inspire irrational trades or something???

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TOP 6 Comments
  • Bloomberg / Other Vpbbg
    Because that's how you read charts - in finance you typically don't do a single complex chart and keep it. You're constantly checking it intra day, adding more data and then dumping it all once you move to the next one

    On TV they have to make it exaggerated as it's live market coverage
    Aug 26, 2018 0
  • Roku Peet’s
    Or just learn to read charts
    Aug 25, 2018 0
  • Oath / Eng [object
    It’s not that they’re bad..it’s just the information is dense. Typical finance charts encodes 4~5 dimensions of data and the brain have a hard time interpreting that many dimensions.
    Aug 25, 2018 3
    • UBS / Finance IkitClaw
      Can you give an example? Most charts I look at have two to four lines max.
      Aug 25, 2018
    • Oath / Eng [object
      A typical stock candle stick chart have these informations: high, low, open, close, plus whether the “candle” is filled or solid and color encoded as green or red.

      That’s 6 dimensions of data already.
      Aug 26, 2018
    • UBS / Finance IkitClaw
      Yes, but it's not that hard to interpret. Where you need more detailed visualisations is when you the data is independent across the various dimensions, like plotting stock price vs. number of tacos eaten in NYC. Plotting highly related information like stock OHLC should best be represent in a chat
      Aug 26, 2018