News-Driven Algorithmic Trading

There is an article close algorithmic trading inwards the latest lawsuit of the Economist magazine, where it says that one-third of all stock trades inwards the US of America are due to algorithmic trading. This should non surprise us. What is to a greater extent than interesting is its cite of the electronically tagged tidings products that are coming out of Dow Jones as well as Reuters, which purportedly enable computers to purchase or sell stocks similar a shot upon the unloose of a tidings item. The information suppliers reckon these tidings products every bit simply about form of cloak-and-dagger high-tech weapons: "Dow Jones claims the concern is thence secretive that it cannot disclose details of customers." Is this hype justified?

Actually, to teach a gustation of news-driven trading, you lot don't quest to pay a hefty fee to purchase i of these products. You tin post away simply monitor the regularly scheduled economical tidings unloose (consumer confidence, novel homes sales, unsmooth inventories, etc.), merchandise the relevant futures, as well as continue to brand millions.

The fact that most of us who monitor these economical tidings releases haven't all the same made our millions is an indication whether these tidings products volition aid you lot create the same. The information contained inwards the tidings is frequently hard to interpret. Even the initial toll reaction to the tidings may locomote wrong, leading to swift reversal later an apparent initial trend. And finally, what's incorrect alongside scanning for abrupt toll movemenets, and then banking concern tally for possible tidings to confirm that the toll motility is due to the unloose of novel information?