Industry The actual News : Making money Through Buying and selling Along with Reduced Latency Information Bottles
Experienced traders recognize the results of global changes on Foreign Exchange (Forex/FX) markets, stock markets and futures markets. Factors such as interest rate decisions, inflation, retail sales, unemployment, industrial productions, consumer confidence surveys, business sentiment surveys, trade balance and manufacturing surveys affect currency movement. While traders could monitor these details manually using traditional news sources, profiting from automated or algorithmic trading utilizing low latency news feeds is an often more predictable and effective trading method that may increase profitability while reducing risk.
The faster a trader can receive economic news, analyze the info, make decisions, apply risk management models and execute trades, the more profitable they are able to become. Automated traders are generally more successful than manual traders since the automation will make use of a tested rules-based trading strategy that employs money management and risk management techniques. The strategy will process trends, analyze data and execute trades faster than a human without any emotion. To be able to make the most of the reduced latency news feeds it is essential to truly have the right low latency news feed provider, have a suitable trading strategy and the proper network infrastructure to guarantee the fastest possible latency to the news source to be able to beat your competition on order entries and fills or execution.
How Do Low Latency News Feeds Work?
Low latency news feeds provide key economic data to sophisticated market participants for whom speed is a top priority. As the remaining portion of the world receives economic news through aggregated news feeds, bureau services or mass media such as news the websites, radio or television low latency news traders count on lightning fast delivery of key economic releases. These include jobs figures, inflation data, and manufacturing indexes, directly from the Bureau of Labor Statistics, Commerce Department, and the Treasury Press Room in a machine-readable feed that is optimized for algorithmic traders.
One approach to controlling the release of news can be an embargo. Following the embargo is lifted for news event, reporters enter the release data into electronic format which is immediately distributed in an amazing binary format. The info is sent over private networks to several distribution points near various large cities round the world. To be able to receive the news data as quickly as you are able to, it is essential a trader make use of a valid low latency news provider that has invested heavily in technology infrastructure. Embargoed data is requested by way of a source never to be published before a specific date and time or unless certain conditions have already been met. The media is given advanced notice to be able to prepare for the release.
News agencies also have reporters in sealed Government press rooms during a definite lock-up period. Lock-up data periods simply regulate the release of all news data so that every news outlet releases it simultaneously. This can be done in two ways: “Finger push” and “Switch Release” are accustomed to regulate the release.
News feeds feature economic and corporate news that influence trading activity worldwide. Economic indicators are accustomed to facilitate trading decisions. The news headlines is fed into an algorithm that parses, consolidates, analyzes and makes trading recommendations based upon the news. The algorithms can filter the news, produce indicators and help traders make split-second decisions to prevent substantial losses.
News is an excellent indicator of the volatility of a market and if you trade the news, opportunities will present themselves. Traders tend to overreact each time a news report is released, and under-react if you have hardly any news. Machine readable news provides historical data through archives that enable traders to back test price movements against specific economic indicators.
Each country releases important economic news during certain times of the day. Advanced traders analyze and execute trades almost instantaneously real raw news when the announcement is made. Instantaneous analysis is made possible through automated trading with low latency news feed. Automated trading can play a part of a trader’s risk management and loss avoidance strategy. With automated trading, historical back tests and algorithms are utilized to pick optimal entry and exit points.
Nearly all investors that trade the news seek to own their algorithmic trading platforms hosted as close as you are able to to news source and the execution venue as possible. General distribution locations for low latency news feed providers include globally: New York, Washington DC, Chicago and London.
The ideal locations to position your servers are in well-connected datacenters that allow you to directly connect your network or servers to the actually news feed source and execution venue. There must be a balance of distance and latency between both. You need to be close enough to the news to be able to act upon the releases however, close enough to the broker or exchange to truly get your order in prior to the masses looking to discover the best fill.
Another Thomson Reuters news feed features macro-economic events, natural disasters and violence in the country. An analysis of the news is released. When the category reaches a threshold, the investor’s trading and risk management system is notified to trigger an entry or exit point from the market. Thomson Reuters includes a unique edge on global news in comparison to other providers being one of the very most respected business news agencies on the planet if not the absolute most respected outside of the United States. They’ve the advantage of including global Reuters News with their feed along with third-party newswires and Economic data for both United States and Europe. The University of Michigan Survey of Consumers report is also another major news event and releases data twice monthly. Thomson Reuters has exclusive media rights to The University of Michigan data.
A news feed may indicate a big change in the unemployment rate. For the sake of the scenario, unemployment rates will show a confident change. Historical analysis may show that the change is not as a result of seasonal effects. News feeds show that buyer confidence is increasing due the decline in unemployment rates. Reports provide a powerful indication that the unemployment rate will remain low.
The big players will typically make their decisions just before all the retail or smaller traders. Big player decisions may affect the market in an unexpected way. If your decision is made on only information from the unemployment, the assumption is likely to be incorrect. Non-directional bias assumes that any major news about a country will generate a trading opportunity. Directional-bias trading accounts for many possible economic indicators including responses from major market players.