Traders can now get automated help as they trade on the fly.
Independent broker ITG recently launched a free tool – the Volume Participation Forecaster App, that aims to answer essential single-day trading questions by forecasting market volumes every 15 minutes during the trading day. The application uses data from recent market conditions along with historical average values to forecast how quickly those conditions are likely to return to their median values.
And the app works globally, meeting the needs of todays global trader. The app offers its forecasts every 15 minutes throughout the local trading day for the US, Canadian, UK, German, Japanese and Hong Kong stock markets.
Ian Domowitz, head of analytics at ITG said all a trader needs to do is simply download the app to his handheld device and plug in an order for a stock. The app then does the rest – suggesting urgency levels throughout the trading day so a traders order gets executed with minimal adverse price selection.
Accurate forecasts of market conditions allow buy and sell-side traders to adjust their strategies to improve trading performance, said Ian Domowitz, head of analytics at ITG. For a trader this is important. Traders want to know how fast his urgency need is given the forecast.
Also, Domowitz added that as the app provides its forecasts throughout the day the trader can then assess what his participation will be at the market close – when volume is heaviest (other than at the open) and overall market participation is heaviest.
How much participation do I neednow before the market closes is the question the trader can ask, Domowitz said. At that point, the trader can see if he needs to find a block or odd-lot, he added.
The trader can also place into the app his desired participation rate and then get back a minimum participation rate plan to follow throughout the trading session.
Domowitz said the app is now available to the public to use in prototype form and ITG welcomes users to try the tool and provide feedback.
The Volume Participation Forecaster App is available free of charge on the ITG Analytics Incubator, along with several other liquidity cost and volatility index applications including the ITG Equity Trading Cost Index and the ITG FX Trading Cost Index. All indexes and applications are available to the institutional trading community via a responsive web site to promote transparency in the equity and FX trading communities.
