Q: What is Nano-Trading? A: Scalping on Steriods, Kinda.

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We are building some new data mining methodologies that are enabling us to do something we have dubbed, "Nano-Trading".

Nano-Trading is a pretty cool concept. The idea is to find Minor Price Events (MPE) in a market that, when sequenced in a particular order will provide a Trade Signal.

The approach here is to flip Technical Analysis investigation on its head a bit.

Frequently, in a Technical Analysis setup, a piece of software may be charged with running the same inquiry over and over again against as many markets as possible.

In Nano-Trading, we sic the software on just one market but request the software to do massive algorithmic crunching against each price movement.

We are looking for small pockets of activity that have a very high probability of resolving themselves in a consistent manner...Kinda like scalping but on steroids.

TA setups are a continuum of monitoring changes in price via an pre-canned indicator, where Nano-Trading is monitoring changes in price for particular patterns, more like candlesticks patterns, but one's that can created and compared at the tick level, and generating Trading Signals from there.


The key here is not to apply the same old strats at smaller and smaller time frames, but rather to allow yourself to envision what kind of Price Patterns might be repeatable if you could actually capture and monitor all of the actual activity.

Scalpers and Technical Analysis software configured for scalping can't process this much information and move this quickly.

Nano-Trading opens up a whole new field, doncha think?

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4 Comments

Nice concept . Bit like micro analysis . I´d be interested in reading some more..

Will be posting some graphics and further info soon.

All the best,
C

I can ponder several issues, the least of which is "publish latency" at the exchange(s) of your choice. With such issues, even co-location doesn't suffice - and I would think that would be a minimum requirement for you. Or I've misunderstood your concept!

Hi Viraf,

Nano-Trading is more about 'small and discrete' as opposed to 'fast' so latency is not such a problem, but as a matter of course we do co-locate.

Hope that this sheds some light for you.

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