oh, please dont get me wrong, I am not trying to educate the masses, who am I after all. Nor do believe writing letters changes politicians. Campaign contributions do not letters (cry, yes a sad state of affairs). I am positing this and many other points as a thought experiment. I like to see how and whether people change their mind if presented with counter arguments and facts. From some of my other posts you see that I have no issue to apologize and stand corrected when proven wrong. I like to hear from those who kiss the HFT ass, because I simply do not understand why they think the way they do other than that their daily bread is paid by those very same firms. Oh and did I forget I have some free time to kill when sitting on my hands and let markets do their magic. (still on my longs in ES from 1050, re my earlier post in another thread). I look for a large collapse in Japanese yen but dont yet see it. Maybe its a harbinger of things to come on the downside although I think its couple days/weeks too early for that. Good trading!!!
Now ure speaking my language. At any rate, markets were never fair in my mind. Never has been, never is and never will be. But I've also learned that it's more profitable to adapt with the changing times and trade with these morons whom you despise. BTW, as I already alluded to in the above post, don't you think HFT had some role (if not a large part) during the market rally last year? Why hasn't anyone bitched about unfair practices and the lack of transparency back then? Or do they not matter when the market is soaring?
i believe HFT has zero effect on any sustained market advance or decline. By their nature they do not hold positions that could be considered risk taking thus they do not represent any capital that is behind speculative buying or selling other than extremely short term trades that do not affect larger moves in the market over a longer time frame.
Laugh all you want... you write like an academic. I've worked with a group that HAS DONE THIS, for the EXACT prices I provided. Why isn't everyone doing this? Because most people are stupid, have zero programming knowledge or drive to learn it, and/or would rather whine like you. Hell, you ever heard of Cyborg? You don't even need co-location to run that program and can HFT all day with that (although, obviously not as effective as co-location). The fact that you made multiple pages of replies shows you're desperate and feel the need to prove yourself. I bet you blame your losing trades on "the market" or the big bad HFT firms... just because you can't do it, doesn't mean it's impossible. In FACT, far from it. I'm sure you will come up with some sort of response to this, but I know what I said is possible and really don't care what BS you dish out.
cyborg is anything but HFT. Sorry but you missed the topic, this is not about short term trading but HFT and anything that is not co-located does not even fit the discussion. Wrong thread...
Jesus. Thats a lot to reply to. You are misinformed or just plain wrong with most of your statements. 1) First lets start by agreeing what HFTs are: Basically, computer controlled trading systems which often trade multiple times per second, often across multiple exchanges and markets. Basically in a manner far faster than a human ever could do. Second based scalping or sub min 'short term trading' is not outside the ability of human traders. I'd also add stat arb market making to HFT because it matches the criteria above. Now to addressing your misinformation / incorrect statements: 2) "the liquidity argument is UTTER BS.": Wrong, my 100% ecn rebates begs to differ, you're welcome if you ever caught one of my better than market prices. 3) "serve except a few privileged parties?": Wrong, I am not privileged in the slightest and I have access to these trading methodologies. But you are wrongly assuming that you should be able to compete with an airline without being able to afford to buy a jumbo jet. Some markets and services require a certain amount of money, hardware and expertise in order to get involved in, inside and outside the financial markets. 4) "sub-pennying" is harmful? If someone is willing to offer a better price than you, whoever is catching the other side of that trade deserves that better price. Maybe you should do some research and figure out how to sub-penny yourself. 5) "Open a company which offers server rentals for co-location at $50/month and I will drop my argument." No thanks, the co-location company offering me 150$ a month does quite nicely. 6) "guys get raped, but also lots of long-term investors" Wrong. The price of anything will ALWAYS tend to fluctuate around fair value in the long run, so it doesn't matter in the slightest to long term investors. In fact HFT helps the long term investors by offering better prices when they occasionally do trade. Retail traders like you whine about it because they take advantage of volatility and arb opportunities far faster than you can, and you end up not being able to make money the way you used to. 7) "BUT every single of those poor bastards had the opportunity to move upstairs to trade from the desk. Or do you want to deny that? " Your saying not every person has the opportunity to get involved in HFT? Just plain incorrect. Learn how to program, do some research, get a cheap colocation, stop being lazy. 8) "What other useful purpose does HFT serve": I'll respond to this by asking you. What purpose do you serve the market? I say I add liquidity, you say thats BS, you say you help force the price towards fair value, i say thats BS. Maybe traders like you should be banned and regulated until you can prove you actually add something significant And a purpose beyond adding liquidity that is _absolutely required_ that HFTs do far better than human traders? Umm lets try inter-market arbitrage. Or would you rather have two fundamentally linked products have completely different prices during high volatility, guaranteeing at least traders of one product is being ripped off. 9) "and find out a second later that it was pulled just 0.1 seconds before I hit then what does that tell me? Bad luck???" Uh yeah, the markets change fast, use limit orders if you don't want to be exposed to market speed risk. What is too fast for you to deal with, isn't too fast for me. Stop whining about it. 10) "paying hundreds of thousands for code development that can execute code in single digit milliseconds and": Oh jesus this just proves how naive you are about computers and computer science in general. 11) "Rest assured a lot more than 1% of the HFT participants move orders around": Yeah HFTs move orders around, thats because they need to react to the market. I can guarantee you that less than 1% is not moving orders around in order to try to 'trick' slow retail traders like you. There is better money to be made elsewhere. Again this comes down to your complaining that the market is 'too fast for you now'. 12) "what purpose do HFT serve then if they can completely disappear when markets get hot?": The stupidity of this statement astounds me. Uh, HFTs are under no agreement to 'stick around when the market gets hot'. Read market makers. Traders like you disappear when the market gets hot too. Imagine if someone complained about your right to choose when to risk your money and when not to. 13) "A good business deal is always something that benefits both sides": Agreed. HFTs make money providing a statistically based service. The other side benefits from tighter spreads and better prices. You're welcome btw. 14) "or when someone got filled 0.1 penny lower on my buy order right in front of my face has nothing to do with "jumping ahead"?" Some ECN posted a fill at a price worse than what you were offering? Two possibilities, your order was not at the exchange at the time it was filled, or the ECN broke the rules by filling a poor sap not at NBBO. As for people breaking the rules of the market, I'm against it. 15) "then you dont even understand what HFT means": I think you are the one who doesn't understand the HFT covers a HUGE range of market participants, not just the guys co-located on the exchange doing predatory trading. It applies to all 'high frequency trading'. Go figure. 16) "EXACTLY. When volatility picks up the spreads are as wide as ever. No HFT bs has ever changed that." Wrong. HFTs definitely do keep the spreads tighter in higher volatility just by the sheer fact they are faster than manual market making and arbing. 17) "LOL, total bollocks. 200/month and a little coding work and you are up and running. Dont make me laugh hysterically." Flat out misinformed, do research. 18) "i believe HFT has zero effect on any sustained market advance or decline": Wrong. See arbitrage.
So, an edge is present and exploited and thats a bad thing amongst you "traders"? Should be called "elite piker".