Daytrader... VS... high-frequency trading

Discussion in 'Trading' started by bat1, Sep 19, 2010.

  1. bat1


    So Mr. Daytrader how you going to out trade a Computer

    that has no feeling or emotion? and can out guess
    your every move.....

    The Financial Industry Regulatory Authority said it had censured and fined Trillium Brokerage Services LLC $1 million and fined and suspended 11 of its employees in connection with using an “illicit high-frequency trading strategy and related supervisory failures” to gain an advantage.

    The financial regulator said that through nine proprietary traders, Trillium entered “numerous” layered, market-moving orders that generated selling or buying interest in specific stocks. By entering those orders, Trillium traders “created a false appearance of buy- or sell-side pressure,” Finra said, noting that because of the strategy, the traders got advantageous prices that otherwise wouldn’t have been available to them on 46,000 occasions.

    Finra said it fined the traders, Trillium’s director of trading and its chief compliance officer a total of $802,500 and ordered a combined $292,000 of disgorgements. The 11 people were suspended from the securities industry or as principals for periods ranging from six months to two years.

    In settling the case, the small New York brokerage and the employees didn’t admit or deny the charges but consented to the entry of Finra’s findings.

    The ‘illicit high-frequency trading strategy’ in question sounds quite a bit like the “quote-stuffing,” a practice spotlighted by The Journal in a front-page story earlier this month. That piece defines quote stuffing “unusually large numbers of orders to buy or sell stocks … placed in a fraction of a second, only to be canceled almost immediately.” Some, theorize that the practice may have played a role in the May 6 “Flash Crash.” A joint SEC/CFTC report on the “Flash Crash” is due sometime this month.
  2. oraclewizard77

    oraclewizard77 Moderator

    I would not trade on their level, and instead swing trade for more points. For example, with the amount of volume they do and the discounted pricing for that volume, they can easily make money on 5 cent moves, whereas I would trade for more profit and use a wider stop then they use.