While this is of course valuable in generating alpha, automated traders are now looking for machine readable news trading in forex. As ever, when it comes to highly time-sensitive data such as news events, there is a need to deliver the feed as close as possible to the exchange’s matching engine in order to minimise latency and maximise the opportunity. While supporting new venues such as in Latin America is clearly essential, in a highly competitive low latency environment keeping abreast of existing venues is equally important. As the concept of machine readable news has evolved, so has user expectation when it comes to content and functionality.
As a result, event driven traders are looking for new and richer types of event data to feed into their automated models. As a result, Deutsche Börse has for some time been adding new non-structured events to its feed in a manner that actually makes their release a tradable opportunity. For events such as FOMC or MPC minutes this involves the careful preparation of questions to generate answers that provide qualitative indicators in a format that can be quantitatively consumed by trading models. Does the FOMC use the phrase “exceptionally low levels of the Fed Funds Rate at least through mid-2013”? This allows them to tailor their trading models to specific aspects of events that they regard as statistically significant and potential alpha opportunities. Therefore, while Deutsche Börse’s developers can obviously formulate draft questions, it is also essential to have direct client input so the questions are as relevant as possible to the largest number of clients. Rather than a market moving event where information is available to all participants, they are looking for data points that are not widely disseminated but that still have major tradable market impact.
The new application integrates with popular execution platforms to deliver drag and drop event driven trading at impressive speeds. No programming skills are required and the trading parameters can be configured for multiple economic indicators and instruments in advance, massively streamlining trader workflow and delivering multiple instant automated order entries. At a stroke, event driven trading has become democratised. It’s also clear that they are not just prepared to accept what they are given. Traders demand meaningful engagement with vendors to achieve a degree of customisation that will enhance their alpha opportunities. Who will make EA for me.