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how to train your machine: jpmorgan fx algos learn to trade better

by:QY Precision      2019-08-24
By Saikat ChatterjeeLONDON (Reuters)-
JPMorgan Chase, the top player of $5. 1 trillion-a-
The global money market has begun to apply a new technology to make machines
Transaction procedures, learn from previous transactions and look for the most profitable way to execute.
Algorithmic trading is a growing trend in the money market, where banks have reduced their trading teams and rely more on automated computing strategies to efficiently trade.
As we all know, market manufacturers use Algos to search for platforms with a deeper liquidity pool at a faster speed, or break up large orders into tiny parts to reduce market impact.
But large banks have been investing millions of dollars in technology to take a bigger share of the algorithmic trading market.
JPMorgan Chase told Reuters that the new algorithm-
Named DNA or deep neural network for algorithm execution-
Effectively combine what many algos are currently doing into a single strategy and allow the framework to judge how customer orders are executed.
Typical time, for example-
The weighted average price order performed by the algorithm may be intended to purchase a specific number of currencies in a few minutes or hours.
However, if the order is not executed within that time frame, the machine will actively trade in the end to purchase the amount required.
The goal of the new algorithm is to make this decision.
Based on the results of past transactions, take the process further by determining how best to execute the transaction.
The algorithm has been used for trading in G7 currencies such as the euro, the US dollar and the pound, where it can get data on thousands of past transactions.
Chi Nzelu, head of macro e-commerce at JPMorgan Chase, told Reuters: \"The goal of the algorithm is to minimize market impact through efficient and timely execution . \".
\"What we do is build a neural network using machine learning technology that determines how to place an order, price and how it is executed.
\"Unlike stocks traded on exchanges, currency trading is conducted on multiple platforms, enabling the use of this automated trading strategy.
Trading platform EBS estimates that 70% of orders on its platform are from algorithms, whereas in 2004 all transactions were made by humans.
JPMorgan Chase\'s own trading platform has also seen a surge in algorithmic trading volume.
The bank said that the number of orders exceeding $5 million increased by 50% per year, and that 80% of orders were driven by Argos, adding that in December, algo franchises set a record in the proportion of orders to spot turnover.
According to a report from the Greenwich Association last week, JPMorgan Chase and Citibank are at the forefront of electronic currency trading, which currently accounts for 80% of global turnover. (
Said saikatji;
Editor of Rao and Alison Williams)
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