February 17, 2011

UNX LLC has integrated pattern recognition algorithms from software vendor Titan Trading Analytics into the UNX Catalyst platform.

Based on the science of behavioral finance, the algorithms generate buy and sell signals to give traders an early warning of when human emotions drive markets.

The firms have developed a plug-in that streams behavioral research and trade strategies from Titan’s TickAnalyst system into the Catalyst platform, according to their release on Tuesday.

To develop and backtest its models, Titan looked at 10 years of tick data and identified patterns in the past when markets were over exuberant and when they were sensing greed, panic or fear, explained John Coulter, president and CEO of Titan Trading Analytics, in an interview with Advanced Trading in 2010. The tick data was laid over broad-based economic indicators and Titan’s own proprietary news sentiment, Coulter said in the interview.

Titan’s simultaneously TickAnalyst system runs all the models through its complex event processing (CEP) engines to “sense” certain market behavior and generate trade signals before the herd mentality kicks in. Traders often receive “high probability” trade ideas hours —or even days— ahead of market correction.

Now the integration of Titan TickAnalyst with Catalyst allows traders to immediately act on buy and sell recommendations by placing orders from the independent, broker-neutral Catalyst EMS (execution management system), according to the release.

Titan was able to initiate development of the plug-in application using UNX’s advanced software development kit (SDK). “Catalyst’s open technology framework and SDK made it extremely easy for us to integrate with TickAnalyst,” Coulter affirms in the release.

“In essence, we’re serving out instant research,” said Coulter in the interview. He explained that Titan selling content, not technology. “We’re making the research actionable so that it’s compatible with any execution management system with a click of the button,” he said in the interview.

In the release, UNX underscores that it’s more than an EMS and order routing network. We are actually building a global community of trading participants and third-party vendors who are developing their own Catalyst plug-ins to create customized trading solutions,” stated UNX Global Head of Product Management Ruth Colagiuri in the release.

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Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in ...