Geeks trump alpha males as algos dominate Wall St

Quote from dtrader98:

I'm curious to hear your thoughts (or any others) on how this is so. From my interpretation, HFT is nothing more than legalized front running. If, as the (former?) nasdaq head claimed, the feeds are in the nano seconds, that means you must have a dedicated fiber optics cable right at the originating server to even be a part of the game--
in addition to having the clout and capital to pay for the privilege to see early information.

As a discretionary trader at home, all the front running transactions would happen at a pace so quickly, you would never even see the information until it was delayed and mixed in with your current feed. If anything it (adds noise and) takes away opportunity from the discretionary trader, not adds to it.

Why do you think floor traders are becoming obsolete? And you think your advantages were anywhere near theirs?
I certainly agree this technology is advantageous for the well capitalized institutional trader desks with 'geeks' as their algorithmic generators, not so much for the 'geeks' at home.
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Points well taken dtrader. But I just don't see HFT as frontrunning. It seems HFT algos take all available info and guess what the next NBBO will be for a stock. They don't set the NBBO, they are guessing it. Even if they are right 99.999% of the time, it is still a guess. Also, the money they make over the course of a year, ~3B, is peanuts compared to the total amount traded in the course of a year. Compare that to the ~3T or more spent bailing out Wall St in various forms. HFT and it's impact is simply a smokescreen non-issue that only impacts a small number of people that is being blown out of proportion to deflect attention from more pressing issues.
 
Quote from cheval fonce:

On the contrary, the market continually changes. Markets evolve, just like genes. As a grad student. This was an interesting read.
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There are only two ways to make money in the markets. Prove me wrong.
 
The days of swashbuckling backslappers on the floor of the New York Stock Exchange have given way to an era of trading dominated by analytical technical whizzes whose computers may be running from a town in deepest New Jersey or Texas.
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I wonder where deepest New Jersey is? Summit?

Also, I misread it as "swashbuckling backstabbers", heh.
 
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