Trade The News – Profiting From Trading With Low Latency News Feeds
Experienced traders are aware of the impact of global currency changes (Forex/FX), stock markets and futures markets. Currency movements are influenced by interest rate decisions, inflation, retail sales, unemployment, industrial production, consumer confidence surveys, business sentiment surveys, trade balance surveys and manufacturing surveys. While traders can track this information manually using traditional news sources, taking advantage of automated or algorithmic trading using low-latency news feeds is often a more predictable and effective trading method that can increase profitability while reducing risk.
The faster the trader can obtain economic information, analyze data, make decisions, apply risk management models and execute trades, the more profitable they can become. Automated traders are usually more successful than manual traders because automation will use a proven trading strategy based on rules that uses money and risk management techniques. The strategy processes trends, analyzes data, and executes transactions faster than a person without emotions. To take advantage of low-latency news feeds, you need to have a suitable low-delay news feed provider, a good trading strategy, and the right network infrastructure to ensure the maximum possible delay. Or execution.
How do short-delayed news feeds work?
Small-latency news feeds provide important economic data to advanced market participants who value speed. While the rest of the world receives economic information through aggregated news feeds, agency services or media such as news websites, radio or television, low-latency news brokers rely on ultra-fast delivery of important business messages. These include the number of jobs, inflation data and manufacturing indices obtained directly from the Bureau of Labor Statistics, the Department of Commerce and the Treasury News Department in a machine-readable stream optimized for algorithmic traders.
The embargo is a method of controlling the publication of news. After the lifting of the embargo from current events, journalists enter these publications in an electronic format, which is immediately distributed in a closed binary format. The data is sent over private networks to various distribution points close to several major cities around the world. To get news information as quickly as possible, it’s important that the vendor uses a functioning low-delay news provider that has invested heavily in the technology infrastructure. The source requires that the data that is prohibited should not be published before a certain date and time or until certain conditions have been met. The media will be informed in advance about the preparations for the exit.
News agencies also have reporters in closed government newsrooms for a certain period of blocking. Data lockout periods simply regulate the release of all news data, so that all media publish it at the same time. This can be used in two ways: “Finger-clicking” and “Switch Release” can be used to control the trigger.
News feeds contain economic and business information that affects business activity around the world. Economic indicators are used to facilitate business decision-making. News is uploaded to an algorithm that analyzes, integrates, analyzes and gives business recommendations based on news. Algorithms can filter news, create indicators and help traders make decisions in a fraction of a second to avoid big losses.
Automated trading programs allow you to make trade decisions faster. Decisions made in microseconds can be compared to a significant market advantage.
News is a good indicator of market volatility, and if you trade on the news, there will be opportunities. Traders tend to overreact to news releases and do not react to them when there is very little news. Machine-readable information provides historical data in the form of an archive, which allows traders to check the price movement on specific economic indicators.
Traders need to know when the data will be published to know when they should be monitoring the market. For example, key U.S. economic data is published from 8:30 a.m. to 10:00 a.m. Eastern Standard Time. Canada transmits information from 7 a.m. to 8:30 a.m. As currencies cover the whole world, traders can always find a market that is open and ready to trade.
THE FIRST key economic indicators
Consumer Price Index
Employment value index
Employment status
Producer price index
Performance and costs
Real income
U.S. import and export prices
Employment and unemployment
Where do you place your servers? Important Geographic Locations for Algorithmic Trading Strategies
Most investors trading information try to place their algorithmic trading platforms as close as possible to the source of information and the place of execution. Global distribution sites for low-delayed news sites include: New York, Washington, D.C., Chicago and London.
The ideal places to host your servers are well-connected data centers that connect your network or servers directly to your actual source and execution location. There must be a balance between distance and latency between them. However, you need to be close enough to the news that you can comment on the messages, but close enough to the broker or exchange to get your order ahead of the masses looking for the best deal.
Suppliers of small-delayed news feeds
Thomson Reuters uses advanced patented technology to create a short-delayed news feed. The news feed is designed specifically for applications and is machine-readable. XML streams are used to create complete text and metadata so investors never miss an event.
Another Thomson Reuters newscast focuses on macroeconomic events, natural disasters and violence in the country. News analysis is published. When a category reaches a threshold, the investor’s trading and risk management system is notified of the entry point or entry to the market.
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