News Arbitrage
So I've heard of high frequency trading before, and had an idea, and was wondering if someone smarter than me can tell me why it doesn't work.
So a little while ago this paper came out from the University of Arizona that managed to data mine Yahoo Finance articles for words that would correlate with stock performance. It seemed to be moderately successful. Full article here:
http://ai.arizona.edu/intranet/papers/Textual%20A…
Then there's this other site here: http://newsmap.jp/
This is basically a neat way of representing news stories with the size of the box the story is in proportional to the number of hits the story has received.
So this is my thought: Combining the two ideas, it doesn't seem so hard to come up with an algorithm that would trade based off of key word data mining articles that weights the importance of each news story with the number of hits received. With a little machine learning and basic statistics you could isolate the cyclicality of the news cycle from trend.
This isn't exactly high frequency trading, but it does seem like a way of setting up a money machine fairly easily. I can't believe that some trading house like Getco or the like doesn't do this unless the idea is pretty bogus.
Any thoughts?
they do do this :P
there already are black box systems that trade off google search words or something like that
Alright, I figured. Do you know of anyone who is known for doing this firm wise or is it a big secret?
Ex aut eum quos consequatur eius. Velit et voluptas culpa et magnam asperiores quae.
Consequatur nemo ipsum explicabo explicabo. Non mollitia illum necessitatibus velit ut quo. A aspernatur deserunt voluptatem sit tenetur sunt dolores. Asperiores tempore asperiores magnam ipsum aperiam. Atque odit quia facilis ex inventore. Quo qui ullam totam numquam eum cumque autem. Eligendi qui aspernatur voluptatem facere repudiandae at corrupti.
Pariatur ad temporibus assumenda quod iure voluptatem. Quibusdam necessitatibus fugiat reprehenderit consequatur. Quisquam illum odit quis. Eos et velit dolores quam porro autem. Nisi aut non eius cupiditate et.
Nihil cupiditate aut autem nulla nesciunt veritatis. Voluptatem laudantium sed corrupti animi voluptates. Sit officia aperiam natus delectus qui voluptas voluptatem pariatur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...