algorythmic trading (algos) - messing up the markets!

This is a discussion on algorythmic trading (algos) - messing up the markets! within the General Trading Chat forums, part of the Reception category; Over the past few monthe it seems as though computers have taken over. They are recieving information for large orders ...

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Old Oct 29, 2009, 9:28am   #1
Joined Oct 2009
algorythmic trading (algos) - messing up the markets!

Over the past few monthe it seems as though computers have taken over.
They are recieving information for large orders etc from eurex and trading off of it milliseconds before we even see it.
They also go counter trend. So they see where people are getting long/short in smaller sized lots, knowing that the people with smaller clip sizes will have tighter stops, then going against them to push them out of the trade to take it a few more points. So your trade can be 100% right but the computers will push the market 20tix opposite to you.
This to me seems very unfair as the computers are taking the human sense out of the market. The computers are recieving data then using it to trade before we even get to see it. How do Eurex expect us to compete with that?!? Its a dis disgrace!
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Old Oct 29, 2009, 9:30am   #2
 
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understand how they work and trade with them imo... no one has a right to make money in the market

but yeah I think a lot of people would pay good money for RSJ's head's head on a plate
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Old Oct 29, 2009, 9:31am   #3
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But these computers create discernable patterns which can in turn be exploited by the nimble.

It's just that the rules are changing somewhat and people need to keep up.

No biggie imho - someone just moved your cheese a little to the left.
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Old Oct 29, 2009, 9:35am   #4
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jfutures started this thread thats the whole point GJ they dont move in any patterns what so ever, so you cannot take advantage of them
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Old Oct 29, 2009, 9:39am   #5
 
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they do...

in fact you described one example there, they try to squeeze out the locals when nothing is happening

so when nothing is happening sit a long way back and get in during the squeeze, then wait for it to come back
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Old Oct 29, 2009, 9:46am   #6
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Originally Posted by arabianights View Post
they do...

in fact you described one example there, they try to squeeze out the locals when nothing is happening

so when nothing is happening sit a long way back and get in during the squeeze, then wait for it to come back
So you would do that? There are a number of reasons why it wouldnt work:
-You wouldnt trade enough
-It may genuinly be a wrong trade
-You dont know that it will even come back as there is no reason it should now if levels of s/r are now broken etc
-There is no logic behind the trade, if someone asked you: "why did you do that?" and you replied: "im not trading off of technical analysis, im waiting for computers to move the market and going aginst them, they would laugh, and have a right to slap you".
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Old Oct 29, 2009, 9:54am   #7
 
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Quote:
Originally Posted by jfutures View Post
So you would do that? There are a number of reasons why it wouldnt work:
-You wouldnt trade enough
-It may genuinly be a wrong trade
-You dont know that it will even come back as there is no reason it should now if levels of s/r are now broken etc
-There is no logic behind the trade, if someone asked you: "why did you do that?" and you replied: "im not trading off of technical analysis, im waiting for computers to move the market and going aginst them, they would laugh, and have a right to slap you".
I'll fade panic (dependent on why it's happening) sure. And yeah it could be wrong, but that doesn't matter, in the long run it'll work even if you do get burnt badly occasionally.

I don't really understand the rest of your comments. You can do that while continuing to trade normally at the same time... it's just another string to your bow, as it were, you don't have to trade off technical analysis or trade "enough", at least not anywhere respectable, and if anyone slaps me I'll slap them back, harder.
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Old Oct 29, 2009, 11:00am   #8
 
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Quote:
Originally Posted by jfutures View Post
the people with smaller clip sizes will have tighter stops,
Adapt or die?

The markets are the fairest thing out there. Survival of the fittest. The best win. There are no social security/benefits. The markets don't give a **** whether you were born in a stately home or in a council flat. They don't care whether you have a PhD, a string of professional qualifications in surveying/law/accountancy and a previously successful £10m business or you brushed public toilets for the first 5 years of your working life with a fag hanging out of the side of your mouth. It doesn't care whether you're black, white, yellow or brown... gay, straight or bi. It doesn't care if you have both arms or type with a device attached to your head. It doesn't care whether you're 18 or 80. You can trade with a laptop or even just a public phone and a copy of the FT (depending on your instrument of choice). I can't think of anything fairer.
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Thanks! The following members like this post: poborsky , trendie , barryb , maxima , incog2009
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