Trade the News: Profiting from trading with low latency news feeds

Experienced traders are able to recognize global market changes in the Foreign Exchange markets (Forex/FX), stock exchanges, and futures markets. Currency movements are affected by factors such as inflation, retail sales and unemployment, industrial outputs, surveys of consumer confidence, surveys of business sentiment, surveys on trade balances, surveys about manufacturing, surveys regarding the state or health in the economy, surveys of consumer confidence, surveys on business sentiment, surveys concerning consumers' opinions, etc. While traditional news sources could be used to monitor the information, automated trading or algorithmic trading using low-latency news feeds can often increase profits and reduce risk.

Faster a trader is able to receive and analyze economic data, take decisions, use risk management models, and make trades the more they will be rewarded. Automated traders tend to be more profitable than manual traders, because they use tested trading strategies that are based on rules and employ money management and risk-management techniques. This strategy is able to process data, analyze trends and make trades much faster than an emotional human. To take full advantage of low-latency news, it's important to choose the best low-latency provider and have the proper trading strategy. You also need the right network infrastructure and to make sure that you have the quickest possible latency.

How Does Low Latency News Work?

News feeds with low latency provide important economic data for sophisticated market players who prioritize speed. Low latency traders rely on the lightning-fast delivery of important economic releases. While most of the world gets its economic news from aggregated feeds or other mass media, such as radio, television, or News websites, low latency traders rely on the rapid transmission of economic data. This includes jobs data, inflation statistics, manufacturing indexes and more, all directly from Bureau of Labor Statistics.

An embargo is one way to control the news release. Reporters enter release data in electronic format after the embargo has been lifted. This proprietary binary format is then distributed immediately. Data is transmitted over private networks near several large cities in the world. To receive news data quickly, it's important that traders use low-latency providers that have invested in their technology infrastructure. A source may request that data not be released before a specific date or time, or until certain conditions are met. Media is given advance notice to allow them time to prepare.

Reporters from news agencies are also placed in the sealed press rooms of Governments during a pre-determined lockup period. The lock-up period is simply a way to regulate all data releases so they are released simultaneously by every outlet. The release can be controlled in two different ways.

The news feeds include economic and corporate stories that have a global impact on trading. Trading decisions are based on economic indicators. News is sent to an algorithm which parses, analyses, and analyzes it. These algorithms filter news and produce indicators, helping traders to make split-second trading decisions.

Software trading applications that automate the process of trading allow for faster decisions. Microsecond decisions can give you a competitive edge.

The news is an indicator of market volatility. If you are trading the news then opportunities will arise. The traders tend to react too much when news is reported and not enough when the news is scarce. The archives of machine-readable news provide historical data that allows traders to compare price movement against certain economic indicators.

Each day, certain countries release important economic information. When the news is announced, advanced traders can analyze it and make trades instantly. Automated trading and low-latency news feeds allow for instantaneous analyses. Trading strategies that include automated trading are often used to manage risk and avoid losses. Automated trading uses historical backtests and algorithms to determine the optimal exit and entry points.

To monitor the markets, traders must be aware of the release date. In the United States, for example, economic data is released from 8:30 to 10:00 am EST. Canada publishes information between the hours of 7:00 am and 8:30 am. Since the world's currencies are spread out, traders can always find an open market.