Even To A Greater Extent Than On Intelligence Driven Trading

News driven trading is fifty-fifty to a greater extent than inwards style today than when I lastly mentioned it, judging from the increasing reveal of vendors (e.g. Ravenpack, Sensobeat, Recorded Future, etc.) in addition to researchers pitching their wares. Not alone are traditional fiscal in addition to economical intelligence deemed important, only researchers accept flora fifty-fifty spider web log posts (at to the lowest degree those on Seeking Alpha) in addition to Twitter (Hat tip: Satya in addition to William) to live predictive of stock prices.

One cardinal cistron to success inwards this type of trading is of course of teaching the might to make access to breaking intelligence ahead of other traders. On the macroeconomic intelligence front, the MIT Billion Prices projection has spun off a companionship called PriceStats to deliver daily consumer production toll index to subscribers. PriceStats compiles this index past times continuously scanning online retailers' websites, in addition to hopefully provides a preview of the official CPI numbers. Whether this is useful for futures in addition to currencies traders is of course of teaching dependent champaign to their rigorous backtests, though the chart displayed on their website does propose that the daily toll index is a leading indicator of the CPI.

There is an of import caveat to using intelligence trading: non all intelligence are equal. So to a greater extent than or less other cardinal cistron to success is to carefully differentiate betwixt the dissimilar types of intelligence in addition to backtest their predictive abilities separately. For example, I recollect to a greater extent than or less enquiry has indicated that an analyst downgrade of a stock from a "hold" to a "sell" rating has to a greater extent than affect than from "buy" to "hold" rating.

My ain sense amongst intelligence driven trading is that for all this trouble, the trading opportunities are relatively few compared to pure toll driven trading, the consistency of success is low, in addition to finally the profitability lifespan is short. If yous accept amend experience, produce part it amongst us.