News Analytics Driving FX Volumes?
- News Analytics drives FX volumes via algorithms that measure the tonality of a news item towards a given currency pair.
Recently I was reading a retail FX CEO response to an FT article. FT Alpha was asking about the activity of traders and the simple answer the CEO gave, was that volumes increased when there was an increase in news events. Think Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term-GREXIT, kicking sleepy day traders into action all of a sudden.
Now here lies the overwhelmingly simple problem for a broker; they can’t rely on a steady flow of market moving news. Even Mario Draghi has to have a holiday from time to time. However, the good news is that according to Acuity’s research, even at the quietest of times we still have an overwhelming amount of lighter news that can be traded on. For example, more than 200 articles are written every day on the EUR/USD in the low season alone. But how does a broker turn this relatively small amount of news into a volume generating opportunity?
The answer lies in relatively new technology called News Analytics Analytics Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision making. In the trading space, analytics are applied in a predictive manner in an attempt to more accurately forecast the price. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analyt Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision making. In the trading space, analytics are applied in a predictive manner in an attempt to more accurately forecast the price. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analyt Read this Term, where algorithms measure the tonality of a news item towards a given currency pair. Do this to all 200 articles at the speed of light, and you have a program that splashes out regular positions on the mood of the market. You can then correlate this with market movements, visually demonstrating to your clients how price reacts to an uptick in sentiment. This is at the heart of what Acuity Trading does.
What’s more is that you can go one step further and advise clients on new changes in market mood, warning them about potential price changes and trading opportunities by comparing current mood changes to past changes.
Recently I was reading a retail FX CEO response to an FT article. FT Alpha was asking about the activity of traders and the simple answer the CEO gave, was that volumes increased when there was an increase in news events. Think Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term-GREXIT, kicking sleepy day traders into action all of a sudden.
Now here lies the overwhelmingly simple problem for a broker; they can’t rely on a steady flow of market moving news. Even Mario Draghi has to have a holiday from time to time. However, the good news is that according to Acuity’s research, even at the quietest of times we still have an overwhelming amount of lighter news that can be traded on. For example, more than 200 articles are written every day on the EUR/USD in the low season alone. But how does a broker turn this relatively small amount of news into a volume generating opportunity?
The answer lies in relatively new technology called News Analytics Analytics Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision making. In the trading space, analytics are applied in a predictive manner in an attempt to more accurately forecast the price. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analyt Analytics may be defined as the detection, analysis, and relay of consequential patterns in data. Analytics also seeks to explain or accurately reflect the relationship between data and effective decision making. In the trading space, analytics are applied in a predictive manner in an attempt to more accurately forecast the price. This predictive model of analytics generally involves the analysis of historical price patterns that are used in an attempt to determine certain price outcomes. Analyt Read this Term, where algorithms measure the tonality of a news item towards a given currency pair. Do this to all 200 articles at the speed of light, and you have a program that splashes out regular positions on the mood of the market. You can then correlate this with market movements, visually demonstrating to your clients how price reacts to an uptick in sentiment. This is at the heart of what Acuity Trading does.
What’s more is that you can go one step further and advise clients on new changes in market mood, warning them about potential price changes and trading opportunities by comparing current mood changes to past changes.