I am learning about how HFT firms trade stocks/futures. Since many brokers(including mine) sell order flow, what type of trading is immune from such an act? Swing trading? Options trading.
Well with futures you have one centralized exchange. So your atleast not getting front run but impossible for retail to compete in say arbitrage between stock index and its corresponding futures.
There is automated market-making in all of the electronic options markets. What that means to you is that both the bids and offers are populated by HFTs, and those bid and offer levels will change with the underlying on an automated basis as well.
I am pretty sure brokers sell orders for futures as well...I am not sure thou. I like to learn a bit more but I am taking Al Brooks course and he was talking about how some bots even scan social media (presumably like ET and alike).
I knew of a proprietary trading group that had AI software that scanned all news feeds and applied that news to a logic grid in order to arrive at a buy or sell signal. Didn't work that great. Mostly because the markets would frequently but not always use "bearish" news as a buying opportunity and vice versa. I used to try to justify paying $1800 per month for a Bloomberg terminal for the news value. Trading news is a very mixed performance endeavor.
No they do not. And front running futures orders is illegal - been that way since forever. I knew a couple floor brokers who executed orders for their own account in front of large customer orders and they were suspended and fined. This was in the waning days of time stamped trading cards.