we will see. I rather take profit on this bounce prematurely because I have a very bearish view. I think this is the environment where you take your profits and run as fast as you can. Nothing like sine March 2009 with stable and low volatility returns. I made almost 50k on this trade for my personal account with very favorable risk/reward ratio, exactly the trade I am after. I am not in the business of flipping coins or trying to read the future. If I had to make a decision to trade at this point (at 1097) I would not put on a trade on the long side. Enough reason for me to get out. If we break 1006 later this Friday or next week I may get back in because the market would show more strength than I anticipated but for now I am convinced I made the right call.
you are also quite winding on definitions. What I disagree with you is your point on "minority" in the bottom section. First of all huge volume is done by HFT as a percentage of total trading volume, large enough to make a material impact. Secondly, the opposite has happened from what you claim: With HFT and darkpools has come LESS transparency in the market. I give it to you that prices have become less arbitragable but the market has for sure not become more transparent and clear. I dont know how you support your claim but its pretty apparent to me that the very definition of dark pools is to conceal transactions to the market place as a whole, how can this be more transparent. What we need is a market place where all trades are known to all parties in listed securities. I can almost foresee what is gonna happen if things dont change. There will come a new exchange which offers total transparency in trade transactions and companies will be fed up to deal with the status quo and move to a system which allows their shares to be exchanged between risk takers in an equitable and fair manner by cutting out a lot of "middle men". That is certainly not in the interest of some parties but for sure in the interest of those who really move markets, which is real-money funds, pension funds, large foreign investors. Hedge funds obviously have an interest to obfuscate their activities and Wall Street does, too, but I think the pendulum is currently swinging towards more regulation than less which will give power to those who are in favor of more transparency in the market. Either Congress, SEC, and regulators get their act together to clean up the current exchanges or a new exchange will emerge to take care of it, one way or the other the days of dark pools and funny ways to front run people through the HFT costumes are counted...
If I understand correctly, propseeker's argument is not that dark pools are making the market more transparent and clear, but that it was dark pools that began the market away from transparency and clarity--that was the point--and this at the behest of the buy side. HFT then came in and started arbitraging the pools against transparent markets, aligning prices, as propseeker put it. How plausible is this scenario: dark pools and other ATS become disconnected from the "markets" that you and I know. Basically, the exchanges enact what you described, forcing all trades to be known to all parties in listed securities. The dark pools/ATS continue as separate, unlinked trading venues, and people who would also like to be listed there can do so. Separate exchanges, in effect.
How can it be possible that "they" don't know what exactly happened!?!? Is not each and every trade traceable?(TOS review) If so, how is HFT to blame if nobody "seems" to know what exactly happened?
in the 80's all the large currrency transactions were done at banks,lets say GE bought a few jet engines from rolls royce,the currency would be exchanged thru the two companies and their banks,the large stock transactions were handked by large firms and they would somrtimes arrange a cross ,but it always went across the tape,when the banks and clearing houses became one, they lobbied to allow the dark pools to operate in the same manner as the just mentioned currency swaps,that wasn't fine,it was criminal,the the very nature of the word market to me means open to the public, not closed to the top 1 or 2% of the capital,its an unfair dishonest criminal action. Then there are the off shore hedge funds and multiple nearly undefineable products,also unfair,dishonest and a huge scheme by banks to take peoples monies. Since we can't touch these 1 or 2%,they have offered us the hft's as a sacrifice, much like they offered up the subprime borrowers 18 months back. The problem is they also have all the information from the electronic clearing that 15 years ago would have been impossible to compile quickly enough to be useful, at there fingertips, 24/7, they are able to guage when the market is oversold or overbought and know when to reverse and collect the most dough ,on top of that they front run your order by a penny or two so that when you do get out for a loss on multiple contracts at different prices ,it's larger ,you have to chase. The whole notion of insider trading is no longer a notion ,it's become an institution, and if you are an HFT,you are forced to buy this insider info just to compete in this arena, so william jennings and others who think they are providing liquidity are willingly getting sucked into this institution, and the larger it gets, the longer it will take to dismantle, in the meantime we will have days like may 6, a lot of them , and there wont be any players left, they will basically kill the golden goose greed is power and it needs to be regulated or it takes on a will of its own
Bullsht. You as any specialist back in the day, they told everyone daytraders PROVIDED liquidity. Something HFT does not do no matter how much they pretend. There is a thin layer of liquidity on this market which is exploited by HFTs and once they sapped that crust the market plummeted . HFT can never hold the argument that they provide liquidity again after that fiasco. They are just a burden on the market and there are enough of them now to kill this market entirely.
Once HFTs disappear you will see real liquidity begin to build in the markets, and real price action take over. Right now the market is a joke as the 1k point drop showed.
FK that other guy . What you are saying is correct. No , they dont have custom made computers, but they do have high end equipement, and the best HFT firms have temperature controlled room after room filled with server on top of servers the size of a football field. All with one purpose in mind. Front run and sap the money out of these markets, out of the pockets of real investors.
then I clearly misunderstood his post and apologize. That was not clear to me from his post. I guess we agree then on that point.
This is true. Scalping high frequency is harder and harder unless you can compete with a microsend algo. Swing trading still works because you just wait for the algos to reverse but having said that even swing trading is tight at times cause your target comes and goes so fast that the cushion of trade positioning is gone so fast that the pattern recognition aspect of trade is compressed. I watched in awe the other day as a buy program juiced by the algos hit so hard and fast that it literally never hit my machine with even enough clarity to trade. My machine froze and the dom blurred and it was off and running.