Thoughts on Market News
SilverTrader was originally conceived in late 2007 as can been seen from the old screen shots I previous blogged, which explains the dated look and feel – news in a list box = boring. Likewise, Bloomberg is very much still stuck in the old style UI land look. The 2007 makeover (here) appears to have had no effect on what Bloomberg think – for one the makeover news heatmap didn’t impress me, hence I suspect it did little to change Bloombergs views.
What’s clear to anyone watching the BBC’s Million Dollar Traders is that news is important. However, I haven’t heard or seen any projects in the last year that use MRN such as Dow Jones Elementized News feed. Apama had something to say on this topic last year. Maybe Aleri should consider added MRN to their MLA charts? Not sure if it would add value, but it would be interesting to see the visual representation of this.
DJ has a visual of News sentiment in the form of a Time Series Indicator leading the DJIA here.
“trend discovery, correlations with market/price activity” – does this actually generate sensible buy/sell signals?
“The next stage is for these traders to look historically at MRN and identify unusual trading patterns based on how the market or specific traders reacted to certain news involving less obvious companies” – anyone seen this in use?
Maybe you could corrolate the release of a PDF reseach report generated by a financial institutions research departments, with MRN data, and the buy/sell request of a client? Or could you use MRN feed + PDF research + trend analysis + market/price activity to generate trade ideas?
I’m sure there is an interesting angle I can add to my latest home project this subject…..
My perspective is of a short term Forex trader (very short term).
Of course, the critical decision is the entry point which I feel should be determined by technical analysis backed up by fundamental analysis.
In other words, an entry position should be defined when it is supported by technical analysis for 5 minute, 15 minute, 1 hour and fundamental analysis which could certainly be influenced by news analysis.
I believe that the world is too complex and move too fast with too many unknowns to be traded only with news analysis – let the market tell you what it is doing through technical analysis and back it up with fundamental analysis.
David Roh
JK@SoftwareByDavid.com
On news analysis. Many prop traders (I was one) have built systems that correlate un-expected economic releases to market moves (e.g. if NFP’s actuals are say +2SD’s from expectations then how might the Bond markets react based on historical analysis of such an event – a very simple analysis that is easily extended to incorporate many rules, such as where Gold correlated with Bonds ).