HFT run wild...video link

[Samsara]

Quote from marketsurfer:

Growing up in the 'hood was rough, NB. I had the crap kicked out of me several times a day, but a stint in el Salvador with the contras turned the tables.

Ah yes, not a doughy momma's boy from a wealthy family. I can only assume a paucity of self esteem is what causes you to act this way.

 

[dewton]

Alright, so a trading company invests a billion dollars to get their latency down from 30 milliseconds down to 20 milliseconds. Three months later a competitor figures out how to get their latency down to 15 milliseconds. Now the firm trading at 20 milliseconds is out of luck. So now what? Will the brightest minds in humanity continue to be employed in such a vain task rather than contribute something meaningful to this planet?

 

[achilles28]

Quote from marketsurfer:

Many would disagree with you. See themis trading blog for a practioners view. Not saying I agree with Joe, just showing the otherside of your post. Surf

I think his main gripes are flash orders, quote stuffing, and to a lesser extent, co-location. Anything that violates FIFO and obfuscates the book (quote stuffing) is abusive and should be banned. The equity flash crash is obviously the result of HFT'ers, since prior to bots, localized micro-crashes (and rebounds) didn't exist, at least to my knowledge. What that's the result of, I don't know. But obviously detrimental to investor confidence in US equity markets. I won't trade stocks because of it. Interesting that futures hadn't experienced the same intra-day liquidity vacuums and rebounds that stocks did. I imagine from the regulatory disparity between the SEC and CFTC governing HFT. Anyway, those are my thoughts. I'm no expert.

 

[marketsurfer]

Quote from Samsara:

Ah yes, not a doughy momma's boy from a wealthy family. I can only assume a paucity of self esteem is what causes you to act this way.

Your really intuitive. I was the fat kid with the coke bottle thick glasses ---You know the type, doughy and uncoordinated with a penchant for baseball cards.

 

[EPrado]

Quote from achilles28:

The fascination with algo-trading is mostly overblown.

Yes, 70% of trades are computer driven. So what?

Market structure on a >5 sec chart hasn't changed much.

True, HFT order flashing and quote stuffing violate FIFO, screw traders, undermine confidence and should be illegal. That's the real story.

The bots going after bots who go after bots... it's all a complex, evolving ecosystem that beats in rapid synchronicity. Nowadays, computers trade for humans against other computers (who trade for humans). It hasn't changed structure, with the exception of fat tails... Most HFT'ers go for penny shavings.

It's kind of ridiculous all of the whining about HFT. Trading comes down to developing strategies, being able to scale/manage position size, having discipline to wait out for the right set-ups, controlling your emotions, and most importantly....money management/risk management skills. If you can do these few things correctly and put the time in you will make it. I don't care who else is out there trading...HFT's...market makers, specialists.......

I began trading in 1992...and while technology has changed , what it takes to be a good/great traders hasn't. A lot of the same guys who are whining now are the same who cried in the 90's how "The specialist screwed me............". Trading is trading people. The ones who bitch the most are the ones who can't grasp the things I mentioned above and push the blame for their losses on others.

 

[heypa]

Yes.

 

[marketsurfer]

Quote from achilles28:

I think his main gripes are flash orders, quote stuffing, and to a lesser extent, co-location. Anything that violates FIFO and obfuscates the book (quote stuffing) is abusive and should be banned. The equity flash crash is obviously the result of HFT'ers, since prior to bots, localized micro-crashes (and rebounds) didn't exist, at least to my knowledge. What that's the result of, I don't know. But obviously detrimental to investor confidence in US equity markets. I won't trade stocks because of it. Interesting that futures hadn't experienced the same intra-day liquidity vacuums and rebounds that stocks did. I imagine from the regulatory disparity between the SEC and CFTC governing HFT. Anyway, those are my thoughts. I'm no expert.

I don't disagree. These are interesting times. Surf

 

[MAESTRO]

Quote from EPrado:

It's kind of ridiculous all of the whining about HFT. Trading comes down to developing strategies, being able to scale/manage position size, having discipline to wait out for the right set-ups, controlling your emotions, and most importantly....money management/risk management skills. If you can do these few things correctly and put the time in you will make it. I don't care who else is out there trading...HFT's...market makers, specialists.......

I began trading in 1992...and while technology has changed , what it takes to be a good/great traders hasn't. A lot of the same guys who are whining now are the same who cried in the 90's how "The specialist screwed me............". Trading is trading people. The ones who bitch the most are the ones who can't grasp the things I mentioned above and push the blame for their losses on others.

Second that! Interesting enough, I also have started trading in 1992. Must be a good year!

Cheers,
MAESTRO

 

[EPrado]

Quote from marketsurfer:

Your really intuitive. I was the fat kid with the glasses ---You know the type, doughy and uncoordinated with a penchant for baseball cards.

Outside of my first marriage, my worst trade/loss involved me trading a 1954 Hank Aaron rookie card for basically a box of cards of average everyday players, and 50 bucks. Back in 1980, 50 bucks bought me a lot more cards so I took the bait. What a dumbass. I think back then the Aaron card was valued at about 500 bucks. I also traded a 1954 Willie Mays to the same guy for a case of bubble yum. Worst part was...the guy who "took me" was my best friend who was like 5 yrs older.....bastard.

 

[Samsara]

Quote from achilles28:

The fascination with algo-trading is mostly overblown.

Yes, 70% of trades are computer driven. So what?

Market structure on a >5 sec chart hasn't changed much.

True, HFT order flashing and quote stuffing violate FIFO, screw traders, undermine confidence and should be illegal. That's the real story.

The bots going after bots who go after bots... it's all a complex, evolving ecosystem that beats in rapid synchronicity. Nowadays, computers trade for humans against other computers (who trade for humans). It hasn't changed structure, with the exception of fat tails... Most HFT'ers go for penny shavings.

Yes, on a micro scale. I have 0 problem with hfts, as I painfully had to adapt. I now operate on a much wider time frame.

If the real liquidity picture beyond the spread is being siphoned off and becomes less transparent as a result, and if at any time a horde of algo strategies behave the same way (as in what some believe happened during the flash crash), the law of unintended consequences comes into play.

Same problem caused by those securitizing CDOs with toxic debt which were then rated AAA and insured via multiple conduits.
Or in Greenspan's words, a "flaw in the model ... [of] the critical functioning structure that defines how the world works".

There is no incentive to model for systemic risk.