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@peterkto, I was always wandering what stops prop traders from taking risks that they would not normally take with their own money. What prevents someone from going for broke? If you are familiar with San Lucci, I think that's exactly what he did and was in fact kicked out of the prop firm...

Your strategy will either provide or consume liquidity. If you are worried about slippage then I assume it will take liquidity. Yes, it would be a concern because the prices move fast and you may not get filled within acceptable slippage. That’s where the latency becomes important.

It’s very expensive to run HFT strategies, so they trade liquid instruments. When you trade thin instruments, your fill rate will be very important and you are likely to experience significant adverse selections.

Strange question to ask in 2023, no?

What is the frequency? Does it hold overnight? You said you used large caps for equities, right? How sensitive to latency? Minimum buying power needed for equities?

The closest I can think of is to have alerts set for multiple stocks and then send market(able) order for the one that triggers first.

There’s no such service because you want both orders to be live at the same time, but brokers will not allow you to do that(exceed your buying power).

He he, so you want to offload the risk to the broker. I like it!

Why can’t you use margin account? Broker cannot guarantee that both orders will not be executed (like on news events), so they don’t allow you to place more at risk than you have.

If you’re US citizen, like I am, you need to get licensed to join prop firm. So too much hustle to just try it.

Well, let’s assume that these guys can trade but for some reason don’t have access to enough money (or can’t get licensed). Let’s say they get five accounts with 100k BP, that’s 500k. They do the split and have NO risk whatever! And if they blow the account, it’s not the client’s money either...

Is that a fact? What’s the difference if let’s say I trade automated and have someone else run the system on day to day basis?

First time I come across something like this. I would assume it would be fraudulent for their clients to do this. https://passyourevaluation.com/?wbraid=Ck4KCQiAuqKqBhCxARI9AP_naQKghLD_w0w0nW1e1lruu-gjw_llPTzQV5jYX91mjL-zAzXhnCEskhtjNwDU77Uz_a_rNidYuStvIhoCzhk

https://apply.workable.com/hold-brothers/j/A5ABE5AD21/

I watched a few videos by Vinny e-mini and my understanding is that he traded exactly this kind of algo. Don’t know much about him, maybe someone could chime in.

I don’t agree. Maybe it was at the beginning. At this point, the micro structure is probably closer to forex with liquidity providers taking the other side of retail order flow.

These are not rules, they are guidelines. I’m talking about firms that take care of their own compliance and use Lightspeed, for example, purely for technology to route orders.

I get it, but the exchange doesn’t want to be involved with erroneous trade resolutions and broker doesn’t want to explain during audit why these happened. That’s why some proprietary trading firms can have edges that you as “retail” trader cannot replicate even if you find them.

I’m what situation do you need to buy a stock 5% above ask? If you have a valid justification for it, you can work with compliance officer to make an exception for you. That’s why it’s up to individual broker dealer to enforce this guidelines.

Why are the caps a problem for your trading?