I am a new trader with under $25,000 looking to day trade, what should I do to start?

d08 · Dec 1, 2018

qlai said:
What intervals would you like for auctions? I think they would leak information. Are these available outside of US?

Below is from Tabb Forum.

Synchronized Frequent Batch Auctions: A Rebuttal
D. Keith Ross, PDQ Enterprises, LLC
18 November 2014
Auctions as a function of equities markets can eliminate pennying, spoofing and gaming, and are especially beneficial as an adjunct to the continuous market. But in the highly advanced and efficient world of electronic trading, implementing synchronized frequent batch auctions would be a major step backwards, causing liquidity as we know it to evaporate and spreads to explode.
Auction ideas in various forms are bubbling up at industry conferences and in the media as a way to improve trading conditions in high-speed markets. The London Stock Exchange recently announced that in late 2015 it will pause regular trading for 2 minutes at midday to run an equity auction. Professor Eric Budish and his colleagues at the University of Chicago are convinced that “frequent batch auctions lead to narrower spreads, deeper markets, and increased social welfare,” according to his comments at the European Capital Markets Institute’s Annual Conference in Brussels last month.

If the trading ecosystem was composed of only natural buyers and sellers who are satisfied with occasional completion of their intended trades, timed auctions might be helpful. In fact, if that were the case, markets could run an auction once a day at the market clearing price and let everyone go home early. The stock market exists, however, to provide secondary liquidity for public companies that have issued stock, and the demand for that liquidity has created a continuous market for buying and selling. The market environment consists of a variety of participants: investors, traders, market makers, issuers and speculators. In the highly advanced and efficient world of electronic trading, synchronized frequent batch auctions would be a major step backwards.

Skipping over the regulatory and logistical hurdles of synchronized frequent batch auctions (SFBA) –which are significant, and whose cost would be orders of magnitude greater than any possible savings or efficiencies – implementing SFBA would cause liquidity as we know it to evaporate and spreads to explode. Today’s equities are priced through sophisticated algorithms that use hundreds of data points as input and make tight and deep markets by hedging quickly to reduce risk. Any artificial blackout of trading, including an interval between auction executions, would mean that the hedging part of a trade would be delayed until the next interval. This would create significantly more risk for each trade. To compensate for this risk, the displayed market would become much smaller and spreads dramatically wider. A blackout period of a full second would easily eliminate at least half of the liquidity that is currently available in any given order book

Let’s consider what an SFBA structure would do for the high-speed arms race. The academic thinking seems to be that it would eliminate latency arbitrage, moderate the speed race and improve market conditions. In actuality, the speed race would simply shift to a new target. The new key to success would be how quickly algorithms could enter auctions or cancel out of them. In a world of milliseconds, let’s assume that an auction is run at the top of every second and takes one millisecond to complete. Therefore, at the completion of one given auction, the algorithm will sprint to place the first order in the book for the following auction. The algorithm races to be first in and get position in the potential auction book, waits for 997 milliseconds, and then decides whether to cancel just before the auction is run. The race is not in the continuous market, but for position in the auction book. Same race; different finish line.

With that being said, there are many benefits to an auction market structure when employed in a different manner. Auction markets can eliminate pennying, spoofing and gaming, and are especially beneficial as an adjunct to the continuous market. Instead of mandating synchronized auctions on a continuous basis, why not allow an aggressive order to determine when an auction should take place? In other words, a venue could host on-demand auctions initiated by the seeker of liquidity. If the order initiator, or liquidity seeker, is willing to have his or her order paused for a very short period, say up to five milliseconds, an auction can be called that would benefit all participants. The liquidity responders would know that they are responding to a marketable order that can be hedged in the continuous market, and if the order indication to liquidity providers is only the symbol, the confidentiality of the order can be protected. Both parties opt into the trade when it fits their parameters.

Auctions as a function of equities markets provide numerous benefits, and their potential has rightly inspired discussion among academic and industry experts. Synchronized frequent batch auctions, however, with their inherent, ongoing dark trading intervals, would send today’s markets back to the dark ages.
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I don't know what the motives of PDQ Enterprises are, they're likely to be beneficiaries of status quo. Unlike people in the universities, assuming they are doing real research and not hit jobs.

There is zero reference to WHY it would cause spreads to explode and why costs would skyrocket. Just claiming this is not sufficient.
I'd be perfectly content with a 2 minute interval auction (or even 5), that means there would be plenty of auctions throughout the day and each one would attract some liquidity. Imbalance only period of say 10 seconds.
There's no need a for a 1 second interval auction, I'm not sure why that is assumed...

US markets have 2 main auctions and numerous other 3rd party ones. Japan has 4 per day (morning open, lunch close, lunch open, evening close).
They all function well and I see no reason why this cannot be extended for the whole day.

destriero · Dec 4, 2018

Silver182 lost $80K averaging down in AAPL. Must be something in the water in NC.

vanv0029 · Dec 4, 2018

This article is old and not right. It has been answered in this early 2017 long article from U of Chicago investment professors.

how efficient are decentralized auction platforms? - Home.uchicago.edu
Article you include are from a HFT participate who has a vested interest in continuing HFT that is really just unenforcable illegal front running. There are no justifications or references to support the authors claims. Ask yourself why would HFTs spend hundreds of millions of dollars to shave millisecs off transaction times if it were fair? Argument about higher cost can't be right since billions spent by HFTs would be eliminated.

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I am a new trader with under $25,000 looking to day trade, what should I do to start?

d08

destriero

vanv0029