ABOUT TIME ITS TAKEN THEM 5 YEARS TO WORK OUT THEY HAVE BEEN FRONT RUNNING EVERY LEGITIMATE ORDER GOING IN THE SYSTEM Regulators in the United States and overseas are cracking down on computerized high-speed trading that crowds todayâs stock exchanges, worried that as it spreads around the globe it is making market swings worse. The cost of these high-frequency traders, critics say, is the confidence of ordinary investors in the markets, and ultimately their belief in the fairness of the financial system. âThere is something unholy about them,â said Guy P.Wyser-Pratte, a prominent longtime Wall Street trader and investor. âThat is what caused this tremendous volatility. They make a fortune whereas the public gets so whipsawed by this trading.â Regulators are playing catch-up. In the United States and Europe, they have recently fined traders for using computers to gain advantage over slower investors by illegally manipulating prices, and they suspect other market abuse could be going on. FULL STORY http://www.cnbc.com/id/44834151
The analysis of the "experts" in this article does not make much sense to me, but perhaps I just don't understand. I would think that the rate of price change which we perceive as volatility has more to do with lower overall volumes due to participants leaving the market. (Fewer resting orders at each price.) Is HFT driving out non-HFT traders? I certainly don't know if that is the case. It could be that volumes are declining simply because there is declining belief in the legitimacy of the markets. It is rather obvious why that might be. I have had to make adjustments to survive in this new trading paradigm and am doing just O.K. at this point, not great. I personally would not be unhappy to see some restrictions put on co-located HFTs. I would like to see at least as level a playing field as possible, and I disagree with those whose position is anyone is free to engage in HFT, or not, as they see fit, so what is the problem? While the rejoinder is true on at least one level,i.e., anyone can, it nevertheless reveals a naivete with respect to the effects of HFT on markets and the question of how desirable is it if one assumes that very broad participation is good for markets, and good for everyone that participates in them. Trading to me, from the time I was able to make any money, has seemed a lot like gambling -- I even think that it is recognition of that that helped me improve my results. The dominance of HFT has made trading seem even more like gambling. But I am not an HFT trader. To the profitable HFT guys, HFT must make trading seem less like gambling, less subjective, and more objective. Your point of view must depend on whether you are an HFT trader or not. I wonder what the end result will be like if we should get to the point where 100% of trading is HFT. Will that be an improvement? And then, how well will the HFT guys do?
interesting argument. i do day trade stocks every single day. tens, if not hundreds of them. it's ain't easy and it's not getting any easier with all subpenny,hft bs,but still..being profitable for number of years i'm not even looking into futures..you do realize that with futures you are going to compete with whole entire world..the best and brightest. while in stocks(specially slow,low volume)-with very few participants. it's might be a pain in the ass to deal with them,but that would be another story.. imo-it's much easier to predict what few are going to do during the day, than hundreds the best of the best..and HFT will be there,in futures too. they ain't going anywhere any time soon. and again-imo there is much more variables that can affect price of the futures than in one particular stock. but..hey...it's just my opinion.. if you can make consistent money from trading futures-go for it
If you don't let someone front-run, ain't nobody going to put their liquidity on the line when it's really needed.
http://www.forbes.com/sites/robertlenzner/2011/10/09/the-crack-down-on-high-speed-computer-trading/ The Crack Down On High Speed Computer Trading if i was an author -i would add-huge buy and sell orders WITHOUT ANY intention to buy or sell anything,but to force YOU to sell at bid and buy at ask.
the people with the loudest voices complaining about HFT are the ones who used to rule the stock market. they're trying to get small traders to think HFT are the problem so they jump on their bandwagon (new class warfare= old rich vs new [and adaptable old] rich). without HFT, the stock market would continue to be just as volatile. think about the current state of the world, there is no reason for the stock market's behavior to not reflect what this country is doing. also, the stock market is just a glorified horse race, why put limitations on something to make it "fair" when, perhaps, it was never fair in the first place?
HFT traders have ruined the market. I read that it's now possible to make round trip trades in fraction of seconds (e.g.1/10th). We need some kind of level playing field , the other problem : HFT traders are sheeps, they all do pretty much the same thing. At least , since they are around, markets are no longer the same, have you noticed. Regulators need to say enough is enough , and put a limit on how many orders can be placed and how many trades can be executed in a given time span by a trader. We could say we are alll going back to manual, that is trades have to be manually entered by the trader and this would not affect other systematic traders. But that'isn't possible, but something limiting inputs should be considered. The point is some rules have to be put in place, the loads placed on systems may also become a systematic risk at some point .