Introduction to Emerging Trends in the Use of Analysis Data
Aggregated pricing data are critical to the successful performance of any analytical program but often bear little resemblance to the actual costs. In this brief article we take a look at some emerging trends in the use of analytics and compare them to the traditional pricing methodologies used by brokers.
Analytical pricing is an important part of market analysis. However, many analysts neglect the importance of monitoring (and optimising) real-time data, reducing the risk of errors in pricing and other decisions. Some of the newer features available in the analytics market now include the ability to automatically adjust market prices using dynamic pricing. The latest innovations in price feed technology and algorithms have made it possible to do this for you, increasing the precision of your trading decisions.
While it is true that many of these new features can be quite complicated, there is an inherent benefit to how price feeds are used in combination with complex calculation to ensure that they generate accurate prices. Using feed pricing in conjunction with complex calculations has been found to significantly reduce the overall error in the inputs used to form the final analysis.
Another change in the use of analytics is the emergence of the first ever publicly available analytical program. The trading platform used by the best e-markets today are designed using many of the same principles as full-blown (not niche) analytical programs and so they employ similar techniques in their complex calculations and flexible trading architecture.
Market makers also have an important role to play in the creation of this whole new discipline. E-markets use a variety of different means of prices (such as auction pricing, static pricing, trading process pricing and daily price processing), and the use of these differing models can dramatically improve the scalability of a trading platform.
Unlike traditional analytically based programs, an e-market can be rapidly changed or developed without needing to have a master program running constantly, making the analyst's job much easier. An e-market programmer can make quick changes or modifications in the middle of the trading day and still continue to trade on autopilot.
Dividends can be a new concept to traders, but it is a very effective way to organise and interpret market data. Using these dividend stocks in conjunction with other financial instruments (such as cross-sells and key arbitrage setups) creates a very quick and easy way to analyse historical data and set risk vs. reward strategies. Dividend stocks are cheap and heavily traded, making them an ideal choice to hedge against high volatility.
The use of trading platforms that allow the application of risk management strategy makes financial trading more effective. Risk management strategies can provide a broad range of benefits to the trader, including tax and capital gains, reduction in the 'barrier to entry' issue and the creation of much less 'spooky' behaviour from a macro perspective.
Some new technologies are still finding their way into the FX markets, most notably high volume traders. Traders who trade thousands of times a month are still finding that it is easier to find a reliable company in the midst of a downward spiral than they were a few years ago, but because of the massive volumes involved in the markets, the problem is still difficult to overcome.
For traders who trade on a daily basis and trade often, high volumes and liquidity can create a number of challenges, especially if you have no experience of trading volume or liquidity. This has lead to the development of a number of new features that make it easier to trade even during the times when you might otherwise be caught out.
Many of these new innovations have been designed to make trading in large volumes much easier, and there are now a large range of performance indicators and settings available to help the trader to find the volume he is looking for. Trading volume is important for any Forex trader, but the additional power afforded by volume indicator settings make it easier to find exactly the right balance between volume and profitability for the trader.
There are many new applications that are either in the works or have already been released to the public that will change the face of trading dramatically, but the key changes related to risk management and analytical capability will become the most important. for many traders in the future.