HFT Myths

hft · May 11, 2013

Quote from toolazy:

if history is any guide HFT & PHD do not live long in world of trading. ego thing makes phd less than useless.

Whew, good thing I don't have a PHD.

CPTrader · May 12, 2013

Hello hft,

Most trading platforms provide a proprietary API and also a FIX connection that supposedly is FIX compliant but as we know every interpretation of FIX is widely different.

1. For a trader without access to DMA i.e. writing to an exchange direct - and writing to a trading platform eg. CQG, TT or T4 would you recommend using the platform's API or using the platform's FIX connection?

2. If writing to an exchange direct, how is an ATS structured such that it can simultaneously connect to CME, ICE, EUREX, LIFFE, HKFE, SGX seamlessly and simultaneously

YoungOne · May 12, 2013

Hello HFT, Thank you for starting this thread.

Do you know people who do longer TF HFT trading? Maybe holding for hours or even days? Do these people do just as well and if so what type of strategies do they employ. Thanks again.

onelot · May 12, 2013

good thread. thanks for providing such high quality info. have a couple of q's:

1) hft firm's offering backing/support... what's the typical minimum requirements these firms are looking for in the typical hftrader? you mentioned software, but i'm guessing track record (how long?), work history (IB or other fund/prop experience needed?), etc.?

2) given a hire/partnership with the above, what's a typical initial alloc look like for a new trader with a firm? what are typical risk limits?

thanks again.

galvinlee888 · May 12, 2013

Quote from toolazy:

if history is any guide HFT & PHD do not live long in world of trading. ego thing makes phd less than useless.

Can someone tell me why i only smell envy and sour grape here??

Most of those young PhD that follow this route are already multimillioaire before 35, some of them still trade, others quit the job and semi retire young. They generally do much better than the 90% of losers here that still struggle to come out with 25k trading capital and profitable.

toolazy · May 12, 2013

Quote from galvinlee888:

Can someone tell me why i only smell envy and sour grape here??

Most of those young PhD that follow this route are already multimillioaire before 35, some of them still trade, others quit the job and semi retire young. They generally do much better than the 90% of losers here that still struggle to come out with 25k trading capital and profitable.

i'll drink to that. live happily and prosper

QuantWizard · May 12, 2013

Quote from YoungOne:

Hello HFT, Thank you for starting this thread.

Do you know people who do longer TF HFT trading? Maybe holding for hours or even days? Do these people do just as well and if so what type of strategies do they employ. Thanks again.

HFT will holding period for hours or days sounds like an oxymoron to me...

76132 · May 12, 2013

HFT: Does your firm do market making and how much do you know about it?

galvinlee888 · May 12, 2013

Quote from toolazy:

i'll drink to that. live happily and prosper

Good

The good thing to join this route using your PhD as your entry ticket to institutional is you will be learning something that not available "outside", you could also accumulate your first pile of gold (bonus, good staring salary and etc) as your trading capital. With the right skill and sufficient capital, your probability to success is much higher. This make the different between the loser and winner.

76132 · May 12, 2013

Quote from hft:

1) Yes. Infrastructure meaning hardware, trading capital, exchange memberships, network lines, historical data, etc. You get some basic software like exchange connectivity and market data. You bring the software that does the trading logic.

2) Capital backing just means you trade with the company's money. The higher payouts like 80% come from places that only give you exchange membership and money to trade with and you have more to handle on your own, and lack of good network connectivity between colocations. 80% is pretty rare, typically you're talking 50-70% for places that don't give you as much for free. These places aren't too common, but HTG is an example of one.

So if you wanted to work for a firm like Getco, you would have to bring in your own trading logic and algorithms? Wouldn't that be tough if you previously worked for another firm?

What would compensation be like for a firm like Getco. I'd assume it's base salary plus some sort of bonus based on the profit you make? Or is your entire salary based on the amount you/firm makes?