There has been a constant growth in the tick data of financial markets. Tick data includes information about every change to the best bid and ask. It also includes tick-by-tick price travels of financial instruments like shares, stocks etc. Historical tick data is commonly used by trading funds and hedge funds in order to invent original trading strategies which they utilize on their own private strategies as tests.
If the people who put the strategies together at these trading firms see some increase in the profit ratio, then the strategies are implemented by the firms in the actual market. These strategies often use pattern matching algorithms. Computer science defines pattern matching as the act of examining some series of tokens for the occurrence of constituents of some patterns.
A computer program which is purposely designed to do this, will carefully scan through the historical data, trying to look for a particular price prototype. Once it’s found, it will try to match it with the current market movements. If the computer based program finds any relationship between the two patterns, then the company will expand a trading strategy on the basis of these patterns.
Clearly, it is not likely to test out these dissimilar trading situations devoid of having all of the essential data for the pertinent markets. This is one reason which is compelling firms to build up their own historical data, in order to allow themselves from testing out new strategies which are on demand.
Tick databases are enormous in size. This is because of the tick-by-tick movements of all the financial markets which take place in the US and other parts of the world. Tick databases can be in very large amounts and can cover a lot of storage space. Tick Data is dedicated to being the lead supplier of worldwide historical intraday market data solutions.
Since the year 1984 many analysts and traders have clearly relied on this tick data to get rid of the aggravation of maintaining and building databases of historical intraday market data. For trading firms this data is very useful and essential. Any mistake in this data can cause them to loose a lot of money in seconds.
The firms must carefully understand the logistics of how to read, analyze and capture tick data. Their systems will have to be quick and prompt so that the data can be processed quickly. These points are very essential in staying competitive with today’s financial market.