The World of High Frequency Trading - the six primary strategies

[Black Swan]

Saw this a while back, meant to post it up in the how big players trade thread but thought it merits a thread all by itself. Worth a look/read imho whilst you're waiting for a set up, or the EUR/USD to hit your 14200 limit/take profit order.. Interesting snippet, as even us low as snakes' tits technical traders get a heads up...we have our uses..


http://www.scribd.com/fullscreen/30295187

 

[anley]

Very good, thanks.

 

[amit1986]

Thanks for that - great information!

 

[Hotch]

This isn't my understanding of HFT at all, I was under the impression HFT generally refers to flash orders etc. How the hell is the 5 day moving after HFT, ha.

EDIT: this is a very very simple introduction http://www.youtube.com/watch?v=2o9AU8MAoq4&feature=related

 

[DionysusToast]

To be honest, I found this quite a disappointment.

I mean "News Story causes a spike in price and large jump in volume, algorithm rapidly buys".

It's just unresearched nonsense made up by some guy at a trading website, right?

 

[amit1986]

To be honest, I found this quite a disappointment.

It's just unresearched nonsense made up by some guy at a trading website, right?

Quite a lot of nonsense trading in HFT, but definitely not made up by some guy at a trading website. You need a boatload of money to setup a HFT interface, so these guys would know what they are doing.

For non-American's, there is a great news show in North America known as "60 Minutes". They often discuss, in detail, a few of the most important news stories happening around the world, every week. Last week I was watching, there was a snippet on high frequency trading. I don't agree with the stuff said at 5:50 -5:59, though. Hopefully it is available for all to see:

http://www.cbsnews.com/video/watch/?id=7368460n&tag=cbsnewsMainColumnArea.9

 

[Hotch]

Amit, DT was referring to the link black swan posted, not HFT. I agree, especially after looking at the T3live website.

 

[Black Swan]

Thanks for that - great information!

Ah it's OK, just a brief intro. covering what the guy reckons are the 6 key strats, not worth getting your nickers in a twist over though eh?

Like I say worth a read whilst you wait for your take profit order to get smashed through for 150 pips...No fookin algo did that though mate, just me own 'ickle grey matter..Algos? I 5hit 'em..

 

[JourneyFX]

Saw this a while back, meant to post it up in the how big players trade thread but thought it merits a thread all by itself. Worth a look/read imho whilst you're waiting for a set up, or the EUR/USD to hit your 14200 limit/take profit order.. Interesting snippet, as even us low as snakes' tits technical traders get a heads up...we have our uses..


http://www.scribd.com/fullscreen/30295187

Quite frankly, I don't see how the link applies to anything that's going to help an online trader who cannot gain access to anything even remotely resembling an HFT paradigm. Arbitrage? I mean, in order to pull that off in the online trading world, you'd need two in-sync trading engines located Client Side and an arbitrage scanner (of sorts), coupled to the ability to connect to multiple and dissimilar margin account sources. You would then need blazing quick auto-execution of the target price and the target differential and you would need equally as blazing quick reverse trading auto-execution to pull the who thing off.

What else does the scrib link not help me understand about online trading limitations.

Yep - I think I understand what's been happening here. A whole lot of air, but not a whole lot of experience. Figures.

 

[anley]

Chill out everyone, it was never meant to be a great academic paper showing the codes and detailed workings.

Like the Swan said it was just a brief overview of the main algo strategies and I for one found it interesting.

 

[DionysusToast]

Chill out everyone, it was never meant to be a great academic paper showing the codes and detailed workings.

Like the Swan said it was just a brief overview of the main algo strategies and I for one found it interesting.

Trouble is - it's not even that.

It's just some nonsense some guy has made up.

I think he started with 6 squares, coloured them in and went from there.

 

[Black Swan]

Chill out everyone, it was never meant to be a great academic paper showing the codes and detailed workings.

Like the Swan said it was just a brief overview of the main algo strategies and I for one found it interesting.

If he really wants to nerd out he'd spend his 'specshul' troll time bitching over on the Wilmott forums, but would be out of his depth. Far 'safer' to sound off on 'ere on the subject...

 

[nunrgguy]

Can't say I know to much about HFT as I'm a retail directional trader but isn't it in the main structured around the front-running of orders and arb opportunities?. What I've never quite got my head around with it is that all the institutions will be running similar algos so net it's all going to cancel out??

 

[Black Swan]

Can't say I know to much about HFT as I'm a retail directional trader but isn't it in the main structured around the front-running of orders and arb opportunities?. What I've never quite got my head around with it is that all the institutions will be running similar algos so net it's all going to cancel out??

interesting point re. the net result; read in a few places that HFT is actually benefitting *us* leaving bigger crumbs for us to potentially feast on..Anyway bud, off out now swimming with my littlest..

 

[StupidCow]

A much more on-target piece from 60-Minutes. It is not too difficult to comprehend.

http://www.youtube.com/watch?v=WstJM_aNSj8&feature=related

 

[DM86]

There was an article on the BBC about high frequency trading. found it quite interesting...

BBC News - What is electronic trading and what effect has it had?