Not yet used trade the news (I was put off by their seemingly clandestine style of joining up) but I have used Ben Lichtenstein's Traders Audio and they are very effective if you already have an edge and are just looking to hone in on the commercial pit traders activity to confirm timely execution. They are also other advantages such as getting news from Ben ahead of most other traders etc.
Save yourself the risk of loss and exponentially raise your chances of winning since these events are few and far between...get bloomberg.
They highlight (red)/asterisk the m&a, upgrades, FDA approvals/failures, DOJ investigations and they provide you the ticker so you don't have to look it up if you don't have it memorized.
if you really want to never lose and consistently make the big bucks (100K-+$1M) in a few seconds, then you need bloomberg.
Also, you have about 3-5 seconds to deploy all your capital towards the trade so you def need a fast ems and smart router. No time to put in the limit, your price should be current inside + like 10 cents for small news or +50 cents for m&a or a fraud/doj investigation. For shares, configure a few shortcut buttons (long and short) to whatever your $ limit is but since you are using a limit on your order, as long as you are within that 3second time frame you can order up to 50K shares per order, no guarantee you will get filled since mkt will def move up/down so you may have to order several times, each time you raise the limit by your addition/subtraction to the inside--so 1st order will be inside + .10, second will be new inside +/- 10, etc.
Initial order should be within 3-4 seconds of news, last order no later than 6seconds. You have about 2-3 seconds to buy/short as much shares as you can. Anything later could cause a huge loss, so the trade should be avoided. You unload about 5% of your position per order, usually 20-45 seconds after you open the position.
Also, since you can't control when news happens--it could happen at 8am or 4:15pm (outside mkt hours) you have to be ready and alert at all times.
Risk of loss for the above is less than 1%. If you do lose, it's either you reacted too late or someone beat you to the chase.
HFT strategies always lose on the initial pop (or drop), however, they make up for the relatively small loss over the next minute when everyone else jumps aboard and the volatility in the name picks up.
Good luck, it takes months of practice but consistency will get you to 8 figure incomes a year with just $1-2Mill in capital.
Save yourself the risk of loss and exponentially raise your chances of winning since these events are few and far between...get bloomberg.
They highlight (red)/asterisk the m&a, upgrades, FDA approvals/failures, DOJ investigations and they provide you the ticker so you don't have to look it up if you don't have it memorized.
if you really want to never lose and consistently make the big bucks (100K-+$1M) in a few seconds, then you need bloomberg.
Also, you have about 3-5 seconds to deploy all your capital towards the trade so you def need a fast ems and smart router. No time to put in the limit, your price should be current inside + like 10 cents for small news or +50 cents for m&a or a fraud/doj investigation. For shares, configure a few shortcut buttons (long and short) to whatever your $ limit is but since you are using a limit on your order, as long as you are within that 3second time frame you can order up to 50K shares per order, no guarantee you will get filled since mkt will def move up/down so you may have to order several times, each time you raise the limit by your addition/subtraction to the inside--so 1st order will be inside + .10, second will be new inside +/- 10, etc.
Initial order should be within 3-4 seconds of news, last order no later than 6seconds. You have about 2-3 seconds to buy/short as much shares as you can. Anything later could cause a huge loss, so the trade should be avoided. You unload about 5% of your position per order, usually 20-45 seconds after you open the position.
Also, since you can't control when news happens--it could happen at 8am or 4:15pm (outside mkt hours) you have to be ready and alert at all times.
Risk of loss for the above is less than 1%. If you do lose, it's either you reacted too late or someone beat you to the chase.
HFT strategies always lose on the initial pop (or drop), however, they make up for the relatively small loss over the next minute when everyone else jumps aboard and the volatility in the name picks up.
Good luck, it takes months of practice but consistency will get you to 8 figure incomes a year with just $1-2Mill in capital.
LOL.
This post would have been really helpful for newbies if it was 2003.
Good luck with your "3-6 second" window for orders after major news headlines. HFT liquidity vaccuum will fill you at the absolute top/bottom and then pull the NBBO out from under you. Just look at a chart of RIMM at 12:00 today. You would have been smoked buying that 3-6 seconds after the news hit BB. The blip from 7.45-7.80 was HFT filling late comers and then pulling the bids out.
Oh, and let's not even get into the news reading algo's who are already firing out orders before a human can read the first word of the headline.
HFT guys go in with orders of 100-1000 shares per order per name. They churn their entire capital every 4 seconds across thousands of stocks in that period, the most an HFT would have had exposure to RIMM today would be about 5-10k shares during the news, rest is after.
It's the news guys that create the pop or drop in the name at the time of the news since they bid/short the entire liquidity with their limit order, HFT guys simply tag along for the ride. I have not heard of an algo designed to deploy $2million on a single order in a stock, nobody would sign off on that. we saw what happend to knight a few months back when their algo went nuts.
This works. It's proven but it's not for everyone. You need to be sharp and that's something that can't be taught. It's for the kids that got 1600 on their sat's cuz they could read, process and act faster than 99.9% of the others.
