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The Guide to Predictive Signals in Trading

Learn how real-time signals can move your firm from low latency to prediction

Firms that have already taken all the practical steps to maximize their tick-to-trade latency are looking to the next frontier: “negative latency,” or prediction. AI-powered trading signals can shed light on where the markets will move in the coming milliseconds, helping to enhance strategies ranging from alpha generation to execution. The Guide to Predictive Signals in Trading can help prepare your firm for this transformation—especially the all-important decision of whether to build or buy signals.

Using Predictive Signals to Enhance Strategies

At the heart of Exegy’s line of predictive signals is artificial intelligence (AI), specifically the subset known as machine learning. The Guide to Predictive Signals explains this method more thoroughly, and shows how your firms can use its power:

  • Alpha Cloning Strategies—Traders trying to track the positions of institutional investors, previously used federal filings to identify their trades – a method that can be weeks or months out of date. But our Signum Liquidity Lamp signal can identify reserve (or “iceberg”) orders in real time.
  • Enhancing Best Execution—Signum’s Quote Fuse and Quote Vector, which use AI to predict the imminence and direction of price changes to the NBBOs of equities, can help enhance algorithms such as volume-weighted average price, fine tuning them to execute more precisely.
  • Preventing Alpha Decay—Because Quote Fuse and Quote Vector are customizable based on a user’s chosen parameters, firms can differentiate themselves from other market participants. The signals can also be used as the basis for their own models.

Build or Buy?

One of the biggest decisions surrounding the use of predictive signals is whether to build those signals in house or buy from a third-party provider. The guide breaks down the necessary steps and expertise required to pursue an in-house solution, so that you can make the right decision for your firm.

The ability to predict market changes is becoming the new table stakes for successful firms. Exegy’s Guide to Predictive Signals in Trading gives you the information you need to stay ahead of the pack. Fill out the form below to download your copy today.

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