Fighting the HFT algos... daytraders and floor traders vs. HFT traders

Discussion in 'Automated Trading' started by candletrader, Aug 28, 2010.

  1. On the issue of HFTs and low latency can I suggest that you read up on how they operate? :confused:

    You seem confused...
     
    #21     Aug 28, 2010
  2. I'd like to meet the person who programmed an HFT system to factor in English language journalism. I am no NLP expert, but I'd expect that to explode at some point.

    I hope you were being sarcastic.
     
    #22     Aug 28, 2010
  3. I have always agreed with you, if someone is doing something illegal, like getting someone's trade information before it hits the order book and place an order before ahead of it (this is front running), that is properly illegal and should be stopped. As for HFTs which are just reacting faster to a changing order book. I have no problem with that.
     
    #23     Aug 28, 2010
  4. There will ALWAYS be someone who knows the order flow (post book) before someone else. ie east cost vs west cost traders. There is no way around this issue. And low latency to the exchange does not facilitate front running. Front running is when someone has privileged access to information before it is placed on a book and can place orders before then. Not someone who can react to a changing order book before someone else.

    http://www.investopedia.com/terms/f/frontrunning.asp
     
    #24     Aug 28, 2010
  5. if a million traders wished to co-locate to avail themselves of the advantages of speed of execution is that a physically possibility?
     
    #25     Aug 28, 2010
  6. Yea, but the ones with the longer network cables would complain that the ones with the shorter network cables are front running them.
     
    #26     Aug 28, 2010
  7. Remember folks, when we are talking about HFT we are talking about very fast machines.... only machines can exploit a few milliseconds latency advantage in order to, in effect, front-run key levels...

    The idea previously posted of west coast traders having a disadvantage vs east coast traders, where all traders in question are human, is a non-issue...
     
    #27     Aug 28, 2010
  8. This is precisely what the HFT programmes have access to... they are front-running, using tricks such as flash orders, exploiting regulatory loopholes which expose market microstructure in advance of it being officially displayed...
     
    #28     Aug 28, 2010
  9. You're are not correctly understanding the definition of front running. It is IMPOSSIBLE for two market participants who have no connection to each other except for data flowing through the order book to front run the other. All data which is acted upon is by definition of coming through the order book, public knowledge.
     
    #29     Aug 28, 2010
  10. Walter, I don't wish to sound rude, but you really have no clue as to how HFT programmes work...

    I suggest you go and do some reading up.
     
    #30     Aug 28, 2010