Experienced traders recognize the effects of global changes on Foreign exchange (Forex/FX) markets, stock markets and futures markets. Factors such as rate decisions, inflation, retail sales, lack of employment, industrial productions, consumer confidence surveys, business belief surveys, trade balance and manufacturing surveys affect currency movement. While traders could monitor this information manually using traditional news sources, benefiting from automated or algorithmic trading utilizing low latency news passes is upcoming nft an often more predictable and effective trading method that can increase profitability while reducing risk.
The faster a speculator can receive economic news, analyze the data, make decisions, apply risk management models and execute trades, the more profitable they can become. Automated traders are generally more productive than manual traders because 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 over a human with no sentiment. In order to take advantage of the low latency news passes it is essential to own right low latency news feed provider, have a proper 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 performance.
How do Low Latency News Passes Work?
Low latency news passes provide key economic data to sophisticated market participants for whom speed is a priority. While the rest of the world receives economic news through aggregated news passes, bureau services or mass media such as news web sites, radio or television low latency news traders count 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 is optimized for algorithmic traders.
One method of controlling the release of news is an embargo. After the embargo is elevated for news event, reporters enter the release data into electronic format which is immediately distributed in a proprietary binary format. The data is sent over private networks to several distribution points near various large cities around the world. In order to get the news data as quickly as possible, it is essential that a speculator use a valid low latency news provider that has invested heavily in technology infrastructure. Embargoed data is requested by a source not to be published before a certain date and time or unless certain conditions have been met. The media is given advanced notice in order to prepare for the release.
News agencies also have reporters in sealed Government press rooms during a defined lock-up period. Lock-up data periods simply regulate the release of all 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 passes feature economic and corporate news that influence trading activity worldwide. Economic indicators are used to facilitate trading decisions. The news is raised on into an criteria that parses, consolidates, analyzes and makes trading recommendations considering the news. The algorithms can filter the news, produce indicators and help traders make split-second decisions to avoid substantial losses.
Automated software trading programs enable faster trading decisions. Decisions manufactured in microseconds may equate to a significant edge in the market.
News is a good indicator of the volatility of a market and if you trade the news, opportunities will present themselves. Traders tend to overreact when a news report is released, and under-react when there is very little news. Machine legible news provides historical data through archives that enable traders to back test price movements against specific economic indicators.