What is information? The word is utilised to denote a wide spectrum of sources, news and data related to all types of financial market but the differentiation of informational value is an absolutely key input to all successful trading strategies.
In the internet age, information has gone exponential. Alongside the mainstream sources that have always dominated the telescopic vision of the market analysts, the web has created a galaxy of new potentially useful loci of information. Furthermore, the traditional media is now operating in real time on the net allowing yet more potentially valuable inputs to be plugged into trading black boxes and trader's minds. Information may be divided into separate niches each of which may have a value if incorporated into one's trading strategy.
The control of this information is the critical factor here and the most fundamental level to begin to address information is the ownership of the information. In a previous post, we complained of Murdoch's takeover of Dow Jones and the Wall Street Journal (see: http://footballisfixed.blogspot.com/2007/07/new-illegal-structure-to-facilitate.html). In such untrustworthy hands as Rupert's, we would not wish to regard ANY information emanating from organs under News Corp's control to be necessarily what it seems. The evaluation of the valuable information from the disinformation is critical and is a basic tool for analysts but modelling is complex and is, consequently, not something that we would wish to focus on in this post. The key structural facet of a corrupt informational source is the duplicity of its nature - professional analysts are able to gain market advantage by correctly determining what is real and what is not. Murdoch does not do honesty and unless one can profile the informational source to a highly professional level, the output is merely observed as noise. And market noise is virtually useless. When any market sector, industry hierarchy, regulatory regime or global institution crosses the threshold of corruption, this is the infrastructure on the table. Holistic analysis, pattern recognition and market memory enable key traders to put the jigsaw of the edifice together at speed through the implementation of a series of analytical tests which reveal the market strategies of the corrupted organ.
The evaluation of other sources is obviously a simpler matter and the basis of the creation of valuable inputs is hierarchical. The constant searching for new primary level sources is an important function. Additionally, all sources must be continually monitored to detect any alteration in output. Falloff in performance of the data or the information being fully accommodated into the market price are two particular knickpoints that are worthy of focus.
Information is also quantum in nature. What we mean by this is that different sources will put mutually exclusive information into the marketplace. Organ A might print that Tevez is a done deal while Organ B might suggest not. With major spectacular society news creations, there is a multiple input nature to this analysis as all mainstream media and sources respond to a hidden agenda with regard to coverage. In the same manner that all market makers gravitate towards a similar market price so it is with information. If everybody is talking about Tevez, you talk about Tevez. We attempt to do the same with our blog although our hidden agenda is proprietary and generally runs contrary to the mainstream. Contrary opinion, like contrary trading, is a rich pool of profit for analysts. All top operators maintain a smallish group of sources that may be fully incorporated into any trading model whilst continually seeking new sources of value. Its an ongoing process throughout one's trading career.
As well as valuable information and disinformation, market operators also target inside information. As we have pointed out over several recent posts, such information is rampant both in football betting markets and in global financial markets (although, infinitessimally surprising is the fact that not one prosecution has been brought in Britain since insider trading on financial markets allegedly became illegal in 1980). There are two routes to inside information. There is information by association and cloned trading. The former would include being on the board of a company, major shareholder informational access, buying information etc while the latter is only for the likes of Goldman Sachs and a few top analysts.
A major issue in the age of internet trading is the "quality" of data. On a trading floor, the prices are posted for all to see and the battle ensues. The internet is a very different infrastructure. All brokers offering internet trading are effectively in the powerful position of being able to manipulate a price to a known trader as soon as such trader has logged onto the platform. It is evident that anonymous price monitoring is a critical input to any trading model which is why Dietrological source all data from a position of anonymity - we are able to access real time real data from the key sources. A simple example of this issue is when a broker is in the situation where both the broker and the trader think alike on a market. It is in the interests of the bottom line that the broker should scalp the trader's price once the broker becomes aware of this shared longer term market angle. There is, however, a key threshold for the price providers in this situation. The top traders do not take kindly to repeated scalping and may move their trading accounts. And with it disappears the broker's valuable market input ie the top trader's honest opinion on events - as such positions are being supported in the only way that informational inputs can be truly pure, by being backed by one's own money. Dietrological utilise many strategies with our brokers in order to disguise our longer term market opinions. Simple strategies like trading the positions singularly and in turn, randomly, mixing in hedging positions etc etc may be combined with a bigger picture overview trading strategies to hide one's portfolio from all brokers. Winnings are gained with a very limited leakage of information. To further dilute this leakage, Dietrological has only ONE core broker. By offering exclusivity, we are able to gain highly privileged perks. This game theorising of the optimum trading activation strategy is a critical market aspect of any successful trading operation or analyst. The longer it takes for the market to be aware of your valuable positions the better. By carefully placing positions incrementally and with disinformational parallel trading, the window of major return on investment (ROI) may be increased by several orders. The science of pitching the threshold on greed needs to be finely tuned.
One of the core talents required to successfully trade the markets is the real time incorporation of pattern recognition at speed to determine and model ever evolving structures. As the economic market place is a psychopathic environment that leaks valuable information, atmospheric analysis reveals realities.
In conclusion, every single person has an agenda. Whether these persons act singularly or in a team or group, their strategy is revealed through their informational output.
These are simply matters of personal and group psychology.
© Football Is Fixed/Dietrological
