Nicholas Pratt
Nicholas Pratt

Integrating news driven algorithms into FX trading strategies

The technology behind machine readable news has become more mature allowing providers to refine their offerings and for high frequency trading firms to use them as a greater part of their quantitative trading strategies. Nicholas Pratt examines what factors a firm must consider when looking to implement machine readable news within their own trading desks and what help may be at hand

Last year this magazine featured an article on machine readable news (MRN). The piece was designed to serve as an introductory guide to this new technology and to highlight how it could be applied to FX trading strategies. In terms of the providers, there were not many to choose from with Dow Jones and a pre-merger Reuters the highest profile content providers with an MRN product, while Apama was one of the few vendors active in the market. In the subsequent months, more providers have emerged on both the content and technology side, while the existing firms have expanded their offerings and explored the more complex side of the MRN market, such as valuing sentiment rather than merely tagging and categorising news. There has also been more interest from potential customers – high frequency hedge funds, sell-side prop desks and even the odd mainstream buy-side firm. The majority of these participants are looking to use MRN to augment their quantitative trading strategies. They are convinced...continued

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