I remember back when I first went prop and learned about bullets. I was pissed, at first. Then I was happy. Pissed because all that time I was banging my head against the wall trying to short on the "uptick" rule. What a rube! Happy afterwards because I had such a cheat and you ( the retail scrub) not only didnt have access to it but didnt even know about it. Happy isnt even the right word. I felt corrupted by having access to corruptible power. An "edge" that was like Barry Bonds' steroids. Allegedly. I wanted MORE corruption. To hell with the rube! Was it "good"? Good for me! But ultimately the answer is No. Because good isnt about your own interests only. Good is keeping the golden goose viable. I dont begrudge HFT anything in terms of infrastructure. Hey, if I had millions for R&D at my disposal I'd colocate with a supercomputer and have a team of quants too. I dont have a problem with their micro second frontrunning, merely the ultimate expression of the market maker con that has been from the beginning. But Clubber Lang has it exactly right. Last couple years Ive seen some shit that even as a non rebate trader is... theft. Except unlike bullets it's overt. Now granted in volume stocks this is not as simple but still. Now what we have is blood doping. This aint steroids. This is a quantum cheat. The Tour de France rider(HFT) tells you he is a superior athlete(trader) and yet every other day another clowns blood comes up iffy. Who's going to watch(trade) with cheats? Im not because there is no credibility. The goose is compromised. Because from my experience those once corrupted can only continue by further corruption. NOT some inherent skill or ability. This is the politicization of trading. Cronyism that cannot be sustained without tearing down the whole house of cards. Now Im making more $ than ever before but no thanks to HFT but the shorter time frames Ive ceded to the bots. I actually dont have a problem with that. Never play a game you cant win. Thats understood. What I do have a problem with is sub pennying and quote stuffing. If you're not going to honor your micro second quotes or shave mine with a loop hole that I dont have access too then while that may be "good" for you, unlike the public I do know the rip off when I see it. You wont cook my goose. Ultimately HFT will get regulated. When they cannibalize one another. Then they will decide HFT guidelines are "good" for the market. Until then watch yourself.
FULL in agreement here. if you think adjusting stops is quote stuffing, head over to Nanex and look at some of the crap they are pulling. This is not trading, not market making, it is computer criminalism - submitting order ONLY with the goal to overload the system so that other people trade blind. NO intention to ever have them executed. Example: http://www.nanex.net/Research/OPRA_081011/OPRA_081011.html http://www.nanex.net/Research/07212011Lag/07212011Lag.html There is a lot more. Check: http://www.nanex.net/aqck/aqckIndex.html What about Dell - 10k book updates in 1 second, ZERO trades. GET - 24th August 2011: 65000 order book updates in 14 seconds, 1 trade. Go through the list and see what they mean with quite stuffing.
here is a proof, a really good quote ,that we are not alone with our observations...not from ET member\trader: A Conversation with Joseph Stiglitz, Nobel Prize-Winning Economist http://rogerdhansen.wordpress.com/2...oseph-stiglitz-nobel-prize-winning-economist/ just like every where else in this country same rules apples to a markets. it a mirror or proxy to our current state..
Clearly they havent, if they all lost their jobs. They stopped earning because what they were using is broken. Also, it's flashing against you with no trades because you have a few market makers dominating the book. ie. they are the first, second, third and forth best bid/offer. You trade, they widen against the direction of the last trade. Hence the market moves with no trades occuring, just bid/offer adjusting. They havent stole anything from you until you hit/lift a bid or offer to get out of your unfavorable position. The MM is still collecting the spread. a market maker can't exit the trade they did with you on their own bid/offer.... Adapting and learning is considered nonsense? Good luck, I hope your not giving your kids that advice.
No doubt quote stuff exists. However, I think a lot of it is not quote stuffing, but rather algos adjusting their orders to what the book is doing. Then another algo makes its adjustments and so on and so on. Before you know it, you have a chain reaction of order book adjustments. Not so much quote stuffing.
+1 to Clubber Lang and Aok I have been hearing about this adapt and learn BS for the last few years. But now it is really really different, because the BOTs are manipulating the game too much. Indeed, the markets are not fair, and indeed, the conditions change and successful traders remain positive by adapting etc etc. But what we are experiencing lately is cannibalism already! I dont know the real statistics but i assume that for every successful HFT perhaps 100 or 500 traders lose money and quit. This is a race to zero for many stakeholders out there, and all they will need is the cycle of this situation, just like everything else in the real economy and the real world. They will need all the users/subscribers to come back and they will surely make sure it happens. Regulating and deregulating stuff is what has been changing the market conditions, and i believe that this is what will change them again. Timing uncertain, but I would like to see the HFTs get regulated and adapt or die, and then enjoy the new environment as it may evolve... I am making less in 2012 than in any given year before that, yet still positive
God your all a bunch of old dogs... Remember the line "Can't teach an old dog new tricks?" Your time has passed... Thanks to heavy quant and algorithmic trading this market patterns more predictably than any in the past... Stop whining and get to work on designing yourself a new trading system for todays market...