Changes in the global economy affect the forex/fx, stock, and futures markets. Seasoned traders understand this. Even though traders might manually follow this news using conventional news sources, automation or algorithmic trading
Trader can maximize their profitability by gathering economic news, studying data, making decisions, using risk management models, and executing transactions as quickly as practical. Because it will follow a tried-and-true rules-based trading strategy that integrates money management and risk management measures, automated trading frequently outperforms human trading. The method will process trends, analyze data, and make trades faster than an emotionless human.
What Drives Low Latency News Feeds?
Low-latency news feeds provide knowledgeable market participants with quick access to critical economic data. Low-latency news traders rely on the lightning-fast delivery of significant economic releases. At the same time, the rest of the world obtains its financial news from mass media outlets like news websites, radio, or television. These employment, inflation, and manufacturing statistics are provided in a machine-readable feed for algorithmic trading by the Bureau of Labor Statistics, the Commerce Department, and the Treasury Press Room.
Imposing an embargo is one method to limit the transmission of news. Reporters enter the release information into an electronic format after the news event’s ban is removed, and it is then immediately distributed in a proprietary binary format. Private networks are used to send the data to various distribution points close to several important cities across the world. A trader must utilize a reliable, low, latency news supplier invested heavily in infrastructure to get the news data as rapidly as feasible. A source may request that some material be placed under an embargo if it needs to be kept secret until a specific day, time, or a few requirements are satisfied. The media is informed in advance to prepare for the release.
Journalists from news organizations are also accommodated in secure government press rooms for a predetermined time. Lock-up data periods restrict the flow of news information so that it can be delivered concurrently to all news organizations. “Finger push” and “Switch Release” are the two methods for controlling the release.
News feeds contain business and economic news that impacts global trade. Economic indicators aid trading decisions. An algorithm provides the information, aggregates, examines, and suggests works based on it. By making split-second decisions, the algorithms can assist traders in limiting losses by providing cues, sorting through the news, and providing alerts.
Faster trading decisions are made possible by automated software trading algorithms. If you can make decisions in a matter of microseconds, you might have a significant competitive advantage.
Because news is an excellent predictor of market volatility, trading the news can help you seize opportunities as they arise. When a news report is released, traders frequently overreact; when there is minimal news, they frequently underreact. Historical data is accessible thanks to machine-readable news archives, allowing traders to analyze price changes with particular economic indexes.
Each nation releases important economic news at various times throughout the day. As soon as the announcement is released, trading professionals assess the situation and almost instantly place transactions. Automated trading and low latency news stream allow for instant analysis. A trader’s risk management and loss avoidance plan may include automated trading. The best entry and exit positions are chosen for automated trading using algorithms and historical backtesting.
To determine when to monitor the market, traders must be aware of the data’s publishing date. Traders may always locate a call as there are open, ready-to-trade marketplaces worldwide. For example, Canada releases crucial economic data between 7:00 and 8:30 AM, while the United States does so between 8:30 and 10:00 AM EST.
- a SMALL selection of the key economic indicators
- Index of Consumer Prices
- Index of Employment Costs
- Workplace Situation
- Index of Producer Prices
- Efficiency and costs
- Actual Income
- Costs for both imports and exports to the United States
- Job availability and unemployment
Where Are Your Servers Located? Geographical Regions of Significant Importance for Algorithmic Trading Strategies
The best places for your servers are in highly linked data centers that let you connect your network or servers directly to where the news feed will be executed and the source of the actual news feed. They need to coordinate their delays and separations. You must be close enough to the broker or exchange to place your order ahead of the crowds searching for the best fill. You must also be informed adequately to respond to press releases.
Providers of Low Latency News Feeds
Thomson Reuters creates a low-latency news stream using unique, cutting-edge technologies. The news feed is machine-readable and was made particularly for apps. To ensure that investors get all the events, entire text and information are produced via streaming XML broadcast.
A different Thomson Reuters news stream covers macroeconomic issues, natural disasters, and international conflict. The news is carefully evaluated. The investor’s trading and risk management system receives a notice when the category hits a threshold, indicating a time to enter or leave the market. When it comes to providing global news, Thomson Reuters has a distinct advantage over other information providers because it is one of the world’s most reputable business news organizations, if not the most reputable outside of the United States. Another significant piece of news is the statistics from the University of Michigan Survey of Consumers report, released twice a month. Thomson Reuters only makes the University of Michigan data available to the media.