Anatomy of a Trade - Sequence Diagram Analysis

Standard non-algo trading methodology but using a technology trading platform (SuperMontage for example) rather than floor-trading. Use Case scenario and sequence diagram analysis below:

1) Portfolio Manager calls trader to buy large number of shares in company A

2) Individual investor decides to sell small number of shares in company A through online broker

3) Trader enters order through Super Montage across multiple levels of market. He buys part of the order from the broker and the balance from other market participants

4) Trades reported through ACT (Automated Confirmation Transaction Service)

5) NASDAQ MarketWatch analyst monitors traders to maintain market integrity

6) At NASD Regulation analysts monitor long term trading patterns to maintain market integrity

7) Investor immediately receives confirmation of the order's execution

8) Portfolio Manager immediately receives confirmation of the order's execution

Fully Parsed Trading Ecosystem Denotation Control Grammar

Areas to consider in the construction of a grammar suitable for expressing the post-modern and post-information age trading ecosystem:

- Parsing by a wide-coverage grammar
- Denotation of a grammar
- Context free grammars used to specify syntax and serve as a basis for parser design
- Dynamic theory of a grammar called Procedural Grammar, where grammatical knowledge reduces to the union of parsing and generation procedures. Grammatical constraints are constraints on processing.
- Lexicon: Contains syntactic and semantic information about words
- Knowledge Base: A formalised representation of a vast quantity of financial knowledge: facts, rules of thumb, and heuristics for reasoning about the objects and events in the trading ecosystem
- Glyphs: The kinds of glyphs to be drawn and the vocabulary and grammar for speech and natural language systems must be known in advance
- Vocabulary: Financial trading tasks require unnatural restrictions on vocabulary (e.g. list of legal names) and specialised phrases - "high frequency trading", "algo trading", "low-latency connectivity", "direct market access", "trend following", etc
- Concepts: Specialised financial concepts
- Conceptual Information: types of entities, timing information, intent of actions
- Language: Visual language used in the financial markets (e.g. Bar Charts, Candlestick Charts, Volume Charts, Equivolume Charts, Point & Figure Charts)