Improve Chances of Investing Success

20 Jan

Experienced traders recognize the effects of global changes on Foreign Exchange (Forex/FX) markets, stock markets and futures markets. Factors such as interest rate decisions, inflation, retail sales, unemployment, industrial productions, consumer confidence surveys, business sentiment surveys, trade balance and manufacturing surveys affect currency movement. While traders could monitor this information manually using traditional news sources, profiting from automated or algorithmic trading utilizing low latency news feeds is an often more predictable and effective trading method that can increase profitability while reducing risk.

The faster a trader can receive economic news, analyze the data, make decisions, apply risk management models and execute trades, the more profitable they can become. Automated traders are generally more successful than manual traders because the automation will use a tested rules-based trading strategy that employs money management and risk management techniques. The strategy will process trends, analyze data and execute trades faster than a human with no emotion. In order to take advantage of the low latency news feeds it is essential to have the right low latency news feed provider, have a proper trading strategy and the correct network infrastructure to ensure the fastest possible latency to the news source in order to beat the competition on order entries and fills or execution.

How Do Low Latency News Feeds Work?

Low latency news feeds provide key economic data to sophisticated market participants for whom speed is a top priority. While the rest of the world receives economic news through aggregated news feeds, bureau services or mass media such as news web sites, radio or television low latency news traders count on lightning fast delivery of key economic releases. These include jobs figures, inflation data, and manufacturing indexes, directly from the Bureau of Labor Statistics, Commerce Department, and the Treasury Press Room in a machine-readable feed that is optimized for algorithmic traders.

One method of controlling the release of news is an embargo. After the embargo is lifted for news event, reporters enter the release data into electronic format which is immediately distributed in a proprietary binary format. The data is sent over private networks to several distribution points near various large cities around the world. In order to receive the news data as quickly as possible, it is essential that a trader use a valid low latency news provider that has invested heavily in technology infrastructure. Embargoed data is requested by a source not to be published before a certain date and time or unless certain conditions have been met. The media is given advanced notice in order to prepare for the release.

News agencies also have reporters in sealed Government press rooms during a defined lock-up period. Lock-up data periods simply regulate the release of all news data so that every news outlet releases it simultaneously. This can be done in two ways: “Finger push” and “Switch Release” are used to regulate the release.

News feeds feature economic and corporate news that influence trading activity worldwide. Economic indicators are used to facilitate trading decisions. The news is fed into an algorithm that parses, consolidates, analyzes and makes trading recommendations based upon the news. The algorithms can filter the news, produce indicators and help traders make split-second decisions to avoid substantial losses.

Automated software trading centument programs enable faster trading decisions. Decisions made in microseconds may equate to a significant edge in the market.

News is a good indicator of the volatility of a market and if you trade the news, opportunities will present themselves. Traders tend to overreact when a news report is released, and under-react when there is very little news. Machine readable news provides historical data through archives that enable traders to back test price movements against specific economic indicators.

Each country releases important economic news during certain times of the day. Advanced traders analyze and execute trades almost instantaneously when the announcement is made. Instantaneous analysis is made possible through automated trading with low latency news feed. Automated trading can play a part of a trader’s risk management and loss avoidance strategy. With automated trading, historical back tests and algorithms are utilized to select optimal entry and exit points.

Traders must know when the data will be released to know when to monitor the market. For instance, important economic data in the United States is released between 8:30 AM and 10:00 AM EST. Canada releases information between 7:00 AM and 8:30 AM. Since currencies span the globe, traders may always find a market that is open and ready for trading.

As Foreign Exchange trading centument review continues its rapid growth, new technology has enabled Forex traders to borrow and adapt techniques of High Frequency Trading, also known as automated trading and algorithmic trading, from the equities markets that spawned them.

Foreign Exchange trading, depending on which statistics you believe, is producing average dollar volume of around $4 trillion per day and estimates are that High Frequency Trading accounts for 30 to 50% of this volume. algorithmic trading or automated trading, offers some distinctive advantages for traders who prefer to conduct trading activities with multiple brokers to octane the best liquidity, lowest spreads and fastest order execution. There are additional benefits to trading with multiple brokers, using more than one data source, trading platform or currency pair.

With High Frequency Trading, having more than one broker enables you to detect if a broker is front running, which is, jumping in just ahead of you in order to negatively affect your fill price. Multiple price data streams permit the trader to compare the prices of a particular currency pair and trade with the most advantageous source. Using more than one trading platform permits the user to customize automated trading scripts and expert advisors to play to the strengths of those platforms.

Finally, Foreign Exchange trading needs to have diversification. Trading multiple currency pairs allows the trader to reduce risk by taking advantage of the tendency of correlated currency pairs, such as the EUR/USD and the AUD/USD to trend in the same direction, or negatively correlated pairs such as the EUR/USD and the USD/JPY to move opposite each other.

High Frequency centument reviews Trading has benefited the Foreign Exchange trading arena as a whole through pushing spreads lower as a result of generating huge levels of buy and sell orders at the milliseconds speeds only possible with modern, high-speed automated trading technology. The individual trader or small trading shop further benefits from the property of algorithmic trading that eliminates emotional influences that cause premature, delayed or simply poor human trading decisions.

High Frequency Trading strategies seek to capture small profits, sometimes thousands of times per minute. Automated trading can examine, consolidate and analyze news events that drive currency prices much faster than traditional sources such as television, radio, standard news feeds or even the Internet.

When combined with a centument software low latency news feed, algorithmic trading can deliver data involving market moving events such as interest rate decisions, inflation figures, industrial production and others in as little as 2 milliseconds, then generate indicators or make trade recommendations to an automated trading system. This translates into something all traders want to gain: an edge.

Foreign Exchange trading, once the exclusive province of governments, international banks and multinational corporations thus becomes available to the individual investor, allowing them to participate against these large entities on equal terms.

Low latency infrastructure combined with multiple brokers, algorithmic trading strategies and extremely fast, low latency news feeds makes High Frequency Trading accessible for Foreign Exchange trading activity to those who otherwise might be left at a serious disadvantage. Even longtime, successful discretionary traders should not turn a blind eye toward the automated trading protocols that will continue to exert an ever-growing influence on Foreign Exchange trading and would further be well advised to explore the possibility of incorporating automated, High Frequency Trading into their Forex repertoire.

If you are looking for a part-time source of earning money, Forex trading can be one of the most suitable options for you. The good thing about this business is that it does not require huge investments to start. You can start it with a reasonable amount. This article throws light in basics of Forex trading helping users understand how to get started in currency trading. According to a recent report by the bank for international settlements, the international foreign market was estimated at around $4 trillion. During the recent years, the market has been growing at a rate of 20%.

Forex market is completely decentralized

Unlike stock trading, Forex trading is completely decentralized market place. The decentralized market place is the market which is specific for one country or territory. The transactions are made all over the world. In the business of Currency trading, three currencies are traded more on account of their high demand in the international market. These currencies are American, Canadian and Australian dollars and the Chinese Yen. They are also known as the majors in the world of Forex trading. These four major currencies contribute more than 80% to overall Forex trading of the world.

How does Forex trading work?

Forex trading, also called centument Ltd foreign exchange trading, involves buying and selling one currency against the others in the hope to earn profit. Profit comes out of the difference between the buying and selling prices of the currencies. You earn profit when the selling price is higher than the buying price. Since, the international Forex market is open for 24 hours, the investors from all over the world can buy and sell currencies whenever they want. The Currency trading is done on the basis of opinions and market knowledge provided by the experts of the brokerage houses.

Forex trading systems are fully automated

In the international Forex market, the currencies are traded from major financial centers such as New York, London, Tokyo, Hong Kong, Singapore, Paris and Sydney. Since the Forex market is so active all over the world, it has become automated so that traders from all over the world stay updated about the transactions taking place. In fully automated Forex Currency trading, there is no human involvement. This type of trading is also called as robot trading because a computer algorithm decides when to buy and sell currencies. It also decides about the timing, price, and quantity. The users only need to update the technical parameters of the program.

Technical trading systems

Basically, there are two types of trading systems; Technical and Fundamental. Technical trading systems provide the traders with technical indicators and charting techniques. With the help of the technical indicators and charting techniques, it becomes pretty easier for traders to understand the price movements and make trading decisions properly. On the other hand, the fundamental trading system is based upon data available in the economic reports.