One uses order types not available to most traders and implement the zero plus algorythm. Who is Haim Bodek?
a sucker is born everyday... if you need people to blame other then yourself for trading losses you will never make money.. i'm sure there are plenty of HFT sucker academic mathematicians that will cause plenty of market disruption for predatory small traders to feed off..
Yes, Computers can make money pushing the market or make money hunting stops. Hunting stops is less risk. This is why you see lots of widening patterns as they run the intraday market from new lows to new highs and back. Good to play with them in this game
When I started this game (almost 30 years ago), I was continually told that no one can run stops because the regulatory bodies would whack them. On chat rooms and boards you were laughed at as an amateur if you even suggested it. Traders told you that it was all your fault for placing the wrong level but they would never tell you how to place the correct level. In the early 2000's I learned from a reputable source that professional market makers run your stops whenever they could and that the regulatory bodies turned a blind eye to the practice which was pretty hard to choose. Lucky for me, I never quite trusted this advice to learn to place stops well instead of suspecting intentional dishonesty and trusting no-one in the markets. Now I hear that SAC is being investigated for insider trading ( another form of front-running in my view). Full circle now, the expert traders know that these things go on all the time and learn to trade in spite of that or quit the game. There is no other choice. While the advice of the trader is responsible for everything and must own up to it is common, I prefer to suggest - find your niche, trust no-one fully, and learn to accept those things you can not change. It is the nature of the beast. Truthfully now, if most people on this board, could get away with things that gave them a shady edge over everyone else, would they stand on principles and say I won't do it? Good for you! Now what do you think a shark (or almost everyone else in the game) would do?
What chat rooms and boards were you on almost 30 years ago? Around that time I got hooked on the PC - the Apple IIe. It was just an awesome machine with dual 5-and-a quarter inch floppy drives, and I spent countless hours playing an adventure game called Destiny.
My very first computer programming was on a PDP8E ( E for extra memory I guess). Later a supernova. I wrote in Turbo C and C++ in the late 80s and 90s. I had my first PC in 1984 and supported them amid other duties. In 1996 I was assigned to figure out the impact of the internet and (with others) teach our 1000 programmers how to adapt it into infrastructure for our company. I outlined a new kind of 3 tier program idea to our VP after year 2000 which he told me later he heard called a web service at a conference he was attending. We were told to imagine the future in our particular area and I dreamed this concept up. In early investing trading, there were hard copy newsletters, salesman, brokers, meetings, seminars, and later on being treated to shows etc. Around the water cooler (we never actually had one) many employees talked investing, especially when they gathered I had some talent in that area. There were no chat rooms 30 years ago I guess - investors reached out in person then. If I remember, I was contacting other interested parties on BBs in the late 1980s, so that was the beginning of chat rooms I guess. It was dialup and slow as the dickens. We used early protocols before world wide web to talk and share. My favorite game was Dune which I played for hours and hours before swearing off video games. I was playing chess in the 70s with some very good players.
Go back a few (or more) years and you could do a find/replace on that article - find "HFT" and replace with "NYMEX local" - and the conclusions would stay the same. Should we go back to the "good old days" when locals would ignore an order if it didn't ring the cash register for them?
Cool post. I knew a guy who ran a BBS in the late '80s as a hobby but not stock or trading related. The first trading chat room I became aware of was with OTA during the tech boom, when the trading education industry was still in its infancy. The moderators were a couple of guys, Kevin Green and I can't remember the other guy's name. It was just a normal morning to see people pulling out "sticks" at the open on a thousand shares or more of a tech stock. I remember being very impressed one day with a member trading from Hawaii, "Fat Crab," who extracted $30,000+ from one stock. Of course not everyone was at or near that level and most were just wide-eyed beginners. But back then there was very little pretense about profits and losses, who was doing well, and who wasn't. Chat rooms and message boards have "matured" since then. In any case, I'm gratified to know you are an older fart than I even though we both started around the same time in stocks. You may predate me by a couple of years. Computer games back then were a lot of fun, with sucky graphics and text. I don't regret the time playing them. Don't get me started on chess, however. That is a world I know all too well. It's definitely a love-hate relationship.
Wow, this thread recalled quite some memories.... Remember those BBS's back in early 90's... no trading/investing related though, cause these activities just barely started in Russia back then.