automated trading and econimic releases

[ivan_milew]

Hi, guys,
Is it possible to connect an automated system to some kind of news service like TradeTheNews and when an economic release, lets say Nonfarm Payrolls, or German GDP, is above or below a given level, it automatically opens a position?

 

[grantx]

Ivan,

On a very basic level you only need to trigger a market order as the figures are released. But you would need to fine-tune this to reflect whether the figures were good or bad and take the appropriate action, ie long or short.

The problem is in interpreation - the market could go in the opposite direction to what the figures imply. Therefore, you may to have include numeous conditions/criteria to identify the correct position.

Grant.

 

[ivan_milew]

Thank you for the quick response, Grant. I take it it is possible to be done. I am a total newby in automated trading so I just needed to know I'm not looking for something that isn't there.

Could you please recommend me some literature on how I could do this? Also, what software to use? Will I need some programming skills? I am certainly not a programming specialist, but I am definitely willing to spend time and learn, if it's necessary to achive what I want to do here.

Thanks a lot

Ivan

 

[MrGecko]

Ivan,

I'm pretty sure you could do it with a bloomie or reuters, it is likely that they have the figure recorded as an instrument in it's own right, so you can set up an algo to send automated orders depending on the updated data. Pricey, and complicated, though.

Not sure how / if it works, but the elementized newsfeed by DJ might be of some intetrest (most newswires just display the economic data as a text release).

Dow Jones Newswires - Dow Jones Solutions for Algorithmic and Quantitive Trading

 

[grantx]

Ivan,

Automated trading is pretty standard these days but it does require a degree of skill. Here is one programme as an example. And the price is pretty good at $749:


Automated Trading Strategies Development Platform

You can also get a free trial:

Automated Trading Strategies Development Platform

Grant.

 

[grantx]

Mr Gecko,

I read about prog's that analyse releases but as I pointed out above, the difficulty is in interpretation - it is rarely black-and-white.

I would just use price reaction - figures released, price up, then buy; price down, then sell (possibly with refinements).

Grant.

 

[MrGecko]

Yep, I wouldn't touch it with a bargepole.

Ivan, do you know something we don't?

 

[ivan_milew]

That's OK, but the price can always initially go in the opposite direction by 10-15p for first couple of seconds after release.

 

[grantx]

Ivan,

If you're trading on the back of news, you're not looking to take a long-term view - in-and-out quick.

Grant.

 

[indexbandit]

The type of system you are speaking of involves A.I and I know some people who are dabbling in that arena, so far with little success. As was mentioned above, there is NO way to predict how the markets will react to anything, whether is be news or data. Most automated systems are based on either price action or time and volume. I usually turn off my auto trading systems when data is expected and trade manually-- and I have found that my signals are still pretty good. However, I like to have the option of whether to participate or not.

 

[ivan_milew]

I don't actually need an A.I. system. I meant it more like I'm gonna set some parametres preliminary before each release. E.g. if the figures are higher than the number set, the system should go long. The problem is from where I can get instant figure releases that the system can recognise and react before the spike?

 

[grantx]

Index,

"the option of whether to participate or not." I'd like to see someone programme that into a system.

Ivan,

First, you will need a professional quote feed - Reuters, Bloomberg, CQG.

Second, you will need to be located as close as possible to the exchange's servers to minimise the distance travelled from your pc.

Third, you will need a sh1tload of money.

Then you can think about employing an expert programmer to write your algorithms because you won't be able to do it yourself.

Grant.

 

[indexbandit]

What I mean Grant is that I turn off the auto-trade features of my systems during expected news and data reports. So the systems still generate signals-- but they don't send orders automatically. That is where trader discretion comes in.

Ivan, if you think its as easy as the expectation is this but the reality is this so.... you're not going to last very long in this game. Markets can stay irrational FAR longer than you can stay solvent.

Bloomberg is the source that professionals use-- and it is priced as such. Good Luck.

 

[grantx]

Index,

I knew exactly what you meant; I was just being flippant.

Grant.