SQL is a programming language used to build some of the most important database systems currently in existence, and understanding a little more about how it functions and what it can do is useful for a variety of reasons, not least because it will give you insights into the world of finance that might otherwise be overlooked.
To that end, here is an introduction to the relationship between SQL and finance, covering both the indirect and direct aspects involved, to bring you up to speed and inform your decision-making going forward.
The effective analysis relies on impactful data use
Gleaning the kinds of analytical insights needed to improve the performance of your financial portfolio is only possible if you are able to master the data you have available.
Since SQL is the underpinning element in a whole range of different database systems, being au fait with its functions and applications will let you improve your analysis abilities and moreover gain an understanding of how information is handled and manipulated across a wide range of fields and industries.
You may even choose to set up your own SQL database to track all of the relevant data points which are involved in your day to day trading activities. In this case, you not only need to think about how things like queries function, but also how well the server itself performs. Problems with the database will lead to sluggish performance and could leave you crucial seconds behind your competitors, so that’s why you should keep an eye on it.
In turn being able to monitor and troubleshoot a database in real time will help you to develop transferable skills, affording you increased agility in your financial maneuvering as well.
As data volumes increase, efficient storage is essential
In the past, it may have been enough to make use of straightforward spreadsheet software to track the various metrics that are involved in your personal and business finances. However, the pace with which data is generated in the digital age is rising, and for plenty of people it will simply become impractical to rely on this old-school approach as a long term solution to their storage needs.
Before spreadsheets become too unwieldy, migrating to an SQL-powered database, such as Microsoft’s SQL server or an open source equivalent like MySQL, will be a strategically sensible choice.
Data volumes will only continue their upward trajectory, and unless you are willing to learn the ropes of SQL, even if it will not be your direct responsibility to deal with database administration, you could find yourself falling behind the pack of better prepared contemporaries.
Human insights are still crucial to extrapolating sense from data
It is worth pointing out that while entering into the world of SQL with a view to leveraging your discoveries to improve your abilities in the finance sector is a good idea, it is equally important to know the limits of what modern data storage and analytics solutions can do.
Chiefly, there is no doubt that while the latest database software is useful up to a point, it is still necessary for the human part of the equation to be up to scratch, and not just become reliant on machines to pull insights from large sets of information and assume that this is good enough.
Rather than relying solely on data, it is better instead to use it to back up your existing feelings and hunches, as having hard evidence pulled from the figures will support your decision-making and inform it, rather than being the only basis for it.
This applies whether you are working towards your own personal finance goals, or you are part of an organization and need to convince others that the suggestions you are making are not only logical, but also potentially lucrative.
Ultimately, SQL and finance have a relationship that is growing closer by the year, and getting to know database software is a worthwhile practice for any aspiring analyst. It is also something that should be seen as just one of the weapons to add to your arsenal, as working towards broadening your skills in many areas is better than focusing on just one.