algorythmic trading (algos) - messing up the markets!

[TAjammy]

So what are we meant to do? Not trade using technical analysis? Only trade fundamentally and have positions for a long long time. Because they can ruin the technicals but not fundamentals.

at worst they could drive a few trend days-giving us a trend, the trend is your friend . or they could make something like black monday a lot worse, in the process losing billions

i've been learning in the past week about just how important fundamentals are. like i used to trade forex, not knowing NFP was coming out! so i'm just sticking with cable for know, learning when she eats,sleeps, runs...

gee forex is bad for algos lol

 

[GammaJammer]

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".

If one of my traders told me that I'd ask him if there's any decent money in his methods and whether or not we needed to go grab one of the algo developer nippers to help.

if however he started spouting bollox about TA driving the price he'd be lucky if he only got a slap. More likely he'd get one of my withering put downs and a disappointed sigh. So much worse.

 

[jfutures]

so where's it say they're getting the orders before they're filled? pre-trade data means pre-open data...

pre trade is before the trade has been filled and is still just an order

 

[jfutures]

at worst they could drive a few trend days-giving us a trend, the trend is your friend . or they could make something like black monday a lot worse, in the process losing billions

i've been learning in the past week about just how important fundamentals are. like i used to trade forex, not knowing NFP was coming out! so i'm just sticking with cable for know, learning when she eats,sleeps, runs...

gee forex is bad for algos lol

yeah i know that the algos will create trends, but they do not mean to. They dont move in trends, they go against trends.

 

[jfutures]

e.g. 121.56 is obvious support from yesterday in the bund. When the market was at 56, an algo would keep selling down to spook people out of trades and maybe set of stop at other support levels.

 

[shadowninja]

Thinking aloud... if I place an order and an algo works on that, why don't I write an algo that places an order then immediately places another order based on the algo that works off the first order and then place another order that is perhaps what I wanted to place in the first place? arty:

 

[arabianights]

pre trade is before the trade has been filled and is still just an order

only if it's a limit order in the order book and everyone has access to that, I am 99% sure that no one is getting market orders in advance (on eurex)

but the main point is... adapt.

 

[arabianights]

Thinking aloud... if I place an order and an algo works on that, why don't I write an algo that places an order then immediately places another order based on the algo that works off the first order and then place another order that is perhaps what I wanted to place in the first place? arty:

people do

 

[jfutures]

Thinking aloud... if I place an order and an algo works on that, why don't I write an algo that places an order then immediately places another order based on the algo that works off the first order and then place another order that is perhaps what I wanted to place in the first place? arty:

sorry mate i relly cant get my head around this. So if you wanted to go long you would go short instead?

 

[arabianights]

sorry mate i relly cant get my head around this. So if you wanted to go long you would go short instead?

If you work out how an algo identifies a large order you can create the same conditions to get the algo to try to front run you... except it's actually filling you.

It's the same conceptually as spoofing.

 

[belflan]

http://vimeo.com/6056298

http://vimeo.com/5414041




worth a look

 

[TAjammy]

yeh make an algo that follows algos

 

[shadowninja]

If you work out how an algo identifies a large order you can create the same conditions to get the algo to try to front run you... except it's actually filling you.

It's the same conceptually as spoofing.

You put it more concisely than me.

In any case, it's just about adapting to circumstances.

 

[GladiatorX]

The idea is; Your not suppose to compete with that; The players have better machines than you - Unless you can compete in scalping with them - Find another way to trade OR your right, your not good enough to compete.... Which isn't unfair; Just means they are better than you, and rightly so, they've built an algo and you haven't.

Basically all you've said is 'I suck compared to other players in the market and i'm annoyed because i want money too' ...
Its like saying football is unfair when another player is faster than you... Its not unfair - its the game your playing.

 

[jfutures]

The idea is; Your not suppose to compete with that; The players have better machines than you - Unless you can compete in scalping with them - Find another way to trade OR your right, your not good enough to compete.... Which isn't unfair; Just means they are better than you, and rightly so, they've built an algo and you haven't.

Basically all you've said is 'I suck compared to other players in the market and i'm annoyed because i want money too' ...
Its like saying football is unfair when another player is faster than you... Its not unfair - its the game your playing.

No, not at all. Im not complaining because i dont make enough money. What the computers do is not trading, there is no general logic behing what they do, so this makes it a completly different game. Its like saying football is unfair if someone picks up the ball. Because then its not football, the same as what they are doing isnt trading.

 

[GladiatorX]

No, not at all. Im not complaining because i dont make enough money. What the computers do is not trading, there is no general logic behing what they do, so this makes it a completly different game. Its like saying football is unfair if someone picks up the ball. Because then its not football, the same as what they are doing isnt trading.

You must have a weird definition of trading then...

'' buying or selling securities or commodities ''

If they are doing anything along them lines then thats fair play.

 

[Paul71]

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!

I understand where you are comming from and i find it rather concerning myself. I called Finspreads about it the other day, but i basically got nowhere, they didn't seem to know what i was refering to. So, i think i'm going to have to write a letter to the Pope and see if he knows anyone with any connections at the LSE. Other than that i'll just have to sack the chairman of the SEC, it's the only way. I'll win in the end, mark my words, i'll take the lot of them to the cleaners.



Paul.

 

[jfutures]

You must have a weird definition of trading then...

'' buying or selling securities or commodities ''

If they are doing anything along them lines then thats fair play.

there is no logic behind their trades. the way they make money is by screwing the other traders over. If the market only had algos in it would be untradeable.

 

[crude_lover]

there is no logic behind their trades. the way they make money is by screwing the other traders over. If the market only had algos in it would be untradeable.

That is totally wrong of course they logic behind how they trade you have to remember for every algorithm made they have developers and quants working on the programming a and trategy for it, for example where i work we have a team that run an algorithm that looks for arbitrage movements and price anomalies in commdotiy derivatives, this certainly has logic and reason behind the trades mainly being some of these price anomalies are only there for a split second which a discrtionary trader would not have time to act on.

It seems your stuck in the "oh algos are only made to screw us over"

 

[donaldduke]

How can a human compete with that? - then cant

Humans can never compete against computers for speed.

Do you suggest we go back to 100% pit trading?