Effect of automated trading on Markets

[FredBloggs]

a lot of these systems are used by brokers for more efficient order filling of large (commercial) size apparently...

http://www.appliederivatives.com/co...7&IssueID=0D6B610A-B0C0-4615-86ADE39F9BBC9A07

...not just prop/quant money makers.

imo this is what kills the trend - massive orders being trickled out rather than dumped in blocks over the course of the day.

who knows - im speculating here (again!!)

 

[martys]

If automated trading volume keeps its pace... it will be more like machines against machines. :eek:

 

[SWScapital]

adapt or die they say. Wink wink nudge nudge....you know if your careful programs that peg the bid/ask can be gamed quite easily....thats all I have to say about that.

 

[duard]

As my grandpappy used to say "Two can play that game."

 

[duard]

Speaking of 'bots. Can you say
"Spring Break 'Bots Gone Wild" today at
12:05:23.


YEEEEHAAAAAAWWWWWWW!!!!!!!!

 

[areyoukidding?]

Quote from Steelhead:

no doubt! even the people who build these machines must get sick of the low volatility they cause.... sheesh look at the nazcrap
what a lame market

What they do in German markets is impose a cancellation fee for canceling orders that would cure it in one second.

 

[nononsense]

Quote from John Merchant:

The joy of scalping is that there is always a trend in SOME timeframe. The only question is "How LOW, can you GO?".

Good question. remember:
Trend Finding is Edge Finding and Edge Finding is Trend Finding
nononsense's axiom

 

[nononsense]

Quote from Trader5287:

It's unbelievable in certain futures markets in Asia and Europe.

Marketmaking is totally automated at certain times. As I write this, the DAX and Paris CAC-40 are on autopilot.

Geo.

Is that so? How do you know this?

 

[nononsense]

Quote from yeayo:

Rage against the Machines!!!

There no good. They revert everything to the mean. Kill every trend before it even starts. Ban them!!

Love them machines. They can't be smarter than the people who built the. Not many smart people hang around in the market, so most of them machines are rather clumsy as well.

 

[wilburbear]

Quote from yeayo:

Yeah you figure post 911, and with all these hedge funds that markets would be as volitile as ever...but no the mean revert bots have prevented that. Think about that, we've had terror attacks, wars, and so much economic/politacal instability yet volitility is at a 20 year low!!! You know why? Cause every bot trader and his quant guru believes in that mythical 'edge' that they feel only a bot can deliver.

The edge is not "mythical". If they lost money doing it, they wouldn't continue. And it's more prevelant now than ever before.