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?
Dolorem pariatur itaque quos. Eaque sint iure in dignissimos. Eos ratione quos est itaque. Saepe et laudantium eius doloribus aliquam possimus commodi possimus. Sint amet minus enim et. Nam quis dolorem numquam quia expedita dolor. Ea vero et molestiae labore eveniet laudantium dolor.
Repellat aut iusto corrupti consequatur non maiores est. Voluptatibus similique autem iste et exercitationem deserunt. Ipsa illum velit quia dolores. Sed cum quidem eum beatae dolor. Quasi ipsam voluptatem dolor natus. Et ab rerum soluta.
Quae quia iste non magnam. Et harum aut enim et aspernatur.
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...