Tuesday, 17 March 2009

Algorithmic FX Trading : Integrating news driven algorithms into FX trading strategies

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 that the leading developers have refined their offerings enough to be of practical benefit to customers and they are now seeking advice on how these can be integrated into their trading desks.