Hands-On Machine Learning for Algorithmic Trading

Business processes

Businesses and public entities produce and collect many valuable sources of alternative data. Data that results from business processes has often more structure than that generated by individuals. It is very effective as a leading indicator for activity that is otherwise available at a much lower frequency.

Data generated by business processes include:

• Payment card transaction data made available by processors and financial institutions
• Company exhaust data produced by ordinary digitized activity or record-keeping, such as banking records, cashier scanner data, or supply chain orders
• Trade flow and market microstructure data (such as L-2 and L-3 order book data, illustrated in Chapter 2, Market and Fundamental Data)