Exchange Typically the News : Profiting Because of Fx trading With the help of Affordable Latency Press Feeds

Experienced traders recognize the consequences of global changes on Foreign Exchange (Forex/FX) markets, stock markets and futures markets. Factors such as for instance 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 a generally more predictable and effective trading method that will 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 could become. Automated traders are usually more successful than manual traders since the automation will use 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 the usual human without emotion. In order to make the most of the reduced latency news feeds it is vital to truly have the right low latency news feed provider, have a suitable trading strategy and the correct network infrastructure to ensure the fastest possible latency to the news source in order to beat the 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 premier priority. While the remaining world receives economic news through aggregated news feeds, bureau services or mass media such as for instance news the web sites, radio or television low latency news traders rely 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’s optimized for algorithmic traders.

One approach to controlling the release of news is an embargo. After the embargo is lifted for news event, reporters enter the release data into electronic format that is immediately distributed in a private binary format. The data is sent over private networks to many distribution points near various large cities round the world. In order to receive the news data as quickly as you are able to, it is vital a trader use a valid low latency news provider that’s invested heavily in technology infrastructure. Embargoed data is requested by a source to not be published before a specific date and time or unless certain conditions have already been met. The media is given advanced notice in order to prepare for the release.

News agencies likewise have reporters in sealed Government press rooms during a defined lock-up period. Lock-up data periods simply regulate the release of most news data so that every news outlet releases it simultaneously. This can be done in two ways: “Finger push” and “Switch Release” are used to regulate the release.

News feeds feature economic and corporate news that influence trading activity worldwide. Economic indicators are used to facilitate trading decisions. The news headlines is fed into an algorithm that parses, consolidates, analyzes and makes trading recommendations in relation to the news. The algorithms can filter the news, produce indicators and help traders make split-second decisions in order to avoid substantial losses.

Automated software trading programs enable faster trading decisions. Decisions manufactured in microseconds may equate to a substantial edge in the market.

News is a good indicator of the volatility of a market and in the event that you trade the news, opportunities will present themselves. Traders have a tendency to overreact when a news report is released, and under-react when there is almost no 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 once the announcement is made. Instantaneous analysis is manufactured possible through automated trading with low latency news feed. Automated trading can play part of a trader’s risk management and loss avoidance strategy. With automated trading, historical back tests and algorithms are utilized to select optimal entry and exit points.

Traders got to know once the data will be released to know when to monitor the market. For example, important economic data in the United States is released between 8:30 AM and 10:00 AM EST. Canada releases information between 7:00 AM and 8:30 AM. Since currencies span the planet, traders may always find a market that’s open and ready for trading.

Where Do You Put Your Servers? Important Geographic Locations for algorithmic trading Strategies

Many investors that trade the news seek to have 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 best locations to place your servers have been in well-connected datacenters that enable you to directly connect your network or servers to the actually news feed source and execution venue. There should be a balance of distance and latency between both. You need to be close enough to the news in order to act upon the releases however, close enough to the broker or exchange to really get your order in in front of the masses looking to discover the best fill.

Low Latency News Feed Providers

Thomson Reuters uses proprietary, state of the art technology to make a low latency news feed. The news headlines feed is made especially for applications and is machine readable. Streaming XML broadcast can be used to produce full text and metadata to make sure that investors never miss an event.

Another Thomson Reuters news feed features macro-economic events, natural disasters and violence in the country. An analysis of the news is released. Once the category reaches a threshold, the investor’s trading and risk management system is notified to trigger an access 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 respected business news agencies on earth or even probably the most respected not in the United States. Amari Bailey They’ve the main advantage of including global Reuters News for their feed along with third-party newswires and Economic data for both United States and Europe. The University of Michigan Survey of Consumers report can also be another major news event and releases data twice monthly. Thomson Reuters has exclusive media rights to The University of Michigan data.

Other low latency news providers include: Need to Know News, Dow Jones News and Rapidata which we will discuss further when they make information regarding their services more available.

Types of News Affecting the Markets

A news feed may indicate an alteration in the unemployment rate. For the sake of the scenario, unemployment rates will show a confident change. Historical analysis may reveal that the change isn’t due to seasonal effects. News feeds reveal that buyer confidence is increasing due the decrease in unemployment rates. Reports provide a powerful indication that the unemployment rate will remain low.

With this particular information, analysis may indicate that traders should short the USD. The algorithm may determine that the USD/JPY pair would yield probably the most profits. A computerized trade would be executed once the target is reached, and the trade will be on auto-pilot until completion.

The dollar could continue to fall despite reports of unemployment improvement provided from the news feed. Investors must bear in mind that multiple factors affect the movement of the United States Dollar. The unemployment rate may drop, but the general economy may not improve. If larger investors don’t change their perception of the dollar, then a dollar may continue to fall.

The big players will typically make their decisions prior to a lot of the retail or smaller traders. Big player decisions may affect the marketplace in an unexpected way. If your decision is manufactured on only information from the unemployment, the assumption will be incorrect. Non-directional bias assumes that any major news about a nation can provide a trading opportunity. Directional-bias trading accounts for many possible economic indicators including responses from major market players.

Trading The News – The Bottom Line

News moves the markets and in the event that you trade the news, you can capitalize. You will find very few of us that will argue against that fact. There’s no doubt that the trader receiving news data in front of the curve has got the edge on getting a solid short-term trade on momentum trade in various markets whether FX, Equities or Futures. The expense of low latency infrastructure has dropped within the last several years rendering it possible to sign up to a low latency news feed and receive the info from the origin giving a huge edge over traders watching television, the Internet, radio or standard news feeds. In a market driven by large banks and hedge funds, low latency news feeds certainly provide the big company edge to even individual traders

Experienced traders recognize the consequences of global changes on Foreign Exchange (Forex/FX) markets, stock markets and futures markets. Factors such as for instance 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…

Experienced traders recognize the consequences of global changes on Foreign Exchange (Forex/FX) markets, stock markets and futures markets. Factors such as for instance 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…