With retail FX traders ever more demanding in terms of execution speed, liquidity and access to global markets from their home computer, an ever more comprehensive and adaptable level of data is required.
However, developing solutions to assist traders aggregate and navigate the mass of market news and events, gauge market confidence and provide accurate signals in a format that is ergonomically refined so that traders can act quickly is a fine science indeed.
Today, LeapRate discussed the advantages of concentrating on big data in order to bring a range of customized information to traders with Andrew Lane, Managing Director of news analytics provider Acuity Trading.
Mr. Lane’s credentials and experience in extrapolating market data and news are extensive indeed, with some twelve years of experience in leadership positions within large firms, concentrating on this methodology.
“It all started in 2002 when I was working at Dow Jones” reminisced Mr. Lane. “I moved to Spain when Dow Jones opened an office there, around 10 years ago, to cover the Southern European region. Whilst there, I came across Ravenpack, a leader in news analytics in the institutional sphere and I was really excited by what they had to offer”, explained Mr. Lane.
“I had the idea of bringing a new type of service to online trading so when I eventually left in 2012 I was able to see my idea come to fruition. We launched earlier this year as a totally independent solution.”
“We integrate a variety of data which we believe gives the best coverage and therefore will generate useful analytics, including a stream that features trending sentiment. Although we are selective about the data sets we use, our focus is very much on how to visualise the data since until now, news analytics has been more focused on quant-crunching hedge funds, resources many companies simply do not have access to in-house.”
In terms of functionality, Mr. Lane favours a global approach to scanning for news events, rather than restricting to social media, which he sees as very US-centric at present. The difference between Acuity’s solution and that of others is that we monitor the entire world wide web, taking as much news and content as we can, amounting to approximately 26 million news stories a day and 500 million social media messages.”
“We scan the news for multiple types of sentiment, for example the level of fear or the buzz surrounding, for example, EURUSD” explained Mr. Lane. “We can paint a picture of the market, as well as measure the volume and volatility of news. What’s exciting is that we can cover anything we want, in multiple languages too, so we are not restricted to Forex.
“The product is predictive but it is more about understanding the mind of the investment community rather than focusing on its predictive nature. Trading is like playing chess blind folded, Acuity gives you a good idea of the opposition pieces.”
Mr. Lane detailed an interesting feature within Acuity Trading’s solution, which is that each client can have their own profile. “With many brokerages that use popular systems, there are very few differences between the functionality and what they offer, whereas we can create new visualizations for specific clients by mixing data sets.”
“Essentially, each client can have their own profile, relevant to the type of trading that they participate in” stated Mr. Lane.
As far as innovation is concerned, Mr. Lane has noticed that there are other firms that wish to enter this segment. “Visualisation of big data is very much the buzz word at the moment but we are constantly developing new ideas to keep us ahead of the game and what’s nice is that you don’t need to be a Hedge Fund to take advantage of this.” Mr. Lane explained to LeapRate.
As well as using charting, traders can use Acuity’s very simple Speedometer to alert themselves to changes in market sentiment, displayed here.
Depicted here is an example of how Acuity’s product accurately depicted investment community sentiment ahead of the Scottish Independence referendum and its impact on GBP/USD.