You guys can keep complaining about HFT or learn their tactics and adapt accordingly to avoid them or use them to your advantage.
Or keep complaining and see where that gets you.
Or keep complaining and see where that gets you.
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HFT vs Small Traders
- Thread starter emg
- Start date
this link:
http://www.jamesaltucher.com/2010/11/8-reasons-not-to-daytrade/
is somewhat true. i disagree with overeating, your eyes go bad, and nothing productive.
Trading is not career if not treating trading as business which many do not know how.
I believe that treating trading as a business must come from working in the house (Banks, Hedge funds, etc etc). when a trader is working in the house, he/she will begin to learn how the house function or their business model. The house employee policy, the house cash flow, how important to hire a cpa, etc etc etc.
Of the those remaining 10% winners within the 90% losers, more than half of them are former prop traders, locals/floor traders, former hft traders, bank traders and so on.
Treating trading as a career must learn from working in the house. This way, a trader will be able to make friends with other traders and networking. After 5-10 yrs working in the house, that trader should have a successful system or some called it "edge" which i think it is a stupid word.
Apparently those 90% losers begin trading by subscribibg 3rd party educational vendors. Those that believe learning trading through 3rd party educational vendors are DOOMED.
A rookie should learn how to trade from a professional traders and those professional traders work for the house. Here will it get tricky. Trading is business. If a rookie wants to learn how to trade from a pro, what will the pro gain from the rookie? That all comes to personality.
Hope this help small traders!
http://www.jamesaltucher.com/2010/11/8-reasons-not-to-daytrade/
is somewhat true. i disagree with overeating, your eyes go bad, and nothing productive.
Trading is not career if not treating trading as business which many do not know how.
I believe that treating trading as a business must come from working in the house (Banks, Hedge funds, etc etc). when a trader is working in the house, he/she will begin to learn how the house function or their business model. The house employee policy, the house cash flow, how important to hire a cpa, etc etc etc.
Of the those remaining 10% winners within the 90% losers, more than half of them are former prop traders, locals/floor traders, former hft traders, bank traders and so on.
Treating trading as a career must learn from working in the house. This way, a trader will be able to make friends with other traders and networking. After 5-10 yrs working in the house, that trader should have a successful system or some called it "edge" which i think it is a stupid word.
Apparently those 90% losers begin trading by subscribibg 3rd party educational vendors. Those that believe learning trading through 3rd party educational vendors are DOOMED.
A rookie should learn how to trade from a professional traders and those professional traders work for the house. Here will it get tricky. Trading is business. If a rookie wants to learn how to trade from a pro, what will the pro gain from the rookie? That all comes to personality.
Hope this help small traders!
Quote from ogarbitrage:
You guys can keep complaining about HFT or learn their tactics and adapt accordingly to avoid them or use them to your advantage.
Or keep complaining and see where that gets you.
these complainers will miss the liquidity. who is going to be on the other side of their crap trades?
MARKETSMAY 5, 2011
Traders Exit High-Speed Lane
Firms Reduce Use of Computer-Driven Strategies as Volatility and Volume Wane
By TOM LAURICELLA
When stocks collapsed in a free fall last May, the fear was that the market had been taken over by high-speed computers that had run amok.
A year after the "flash crash," which saw the Dow Jones Industrial Average plunge 600 points in less than 10 minutes, the stock market is a much quieter place.
Companies that use fast-trading, computer-driven strategies, which were painted by some as culprits of the collapse, have curtailed trading. So, too, have many long-term investors, for whom the trauma of that May 6 afternoon was the final straw after a decade of stock-market turmoil. In their absence, trading volume and volatility have plunged, further deterring high-frequency traders.
High-frequency strategies "have less to work with, so they don't participate, which creates less volume," said Will Mechem, a managing partner at high-frequency trading firm Pan Alpha Trading. "This would seem to be a vicious cycle."
Associated Press
Arthur Andrews, of Banc of America Specialists Inc., on the floor of the New York Stock Exchange on May 6, 2010, during the 'flash crash.'
Read More
Mini 'Crashes' Hit Commodity Trade
In the first four months of this year, average daily trading volume of stocks listed on the New York Stock Exchange and Nasdaq Stock Market is down 15% from 2010's pace, running at an average rate of 6.3 billion shares a day. Volume has been edging lower throughout the year, with April's daily average of 5.8 billion shares marking the slowest month since May 2008.
"The ripple effects across trading from the lack of fundamental demand are very real," said Jose Marques, global head of electronic equity trading at Deutsche Bank AG.
Volume had marched higher for most of the last decade, escalating during the financial crisis. It doubled between 2006 and March 2009, when an average of nine billion shares changed hands every day.
A big reason for the decline in volumes has been a general quieting of the big swings in stock prices commonly seen from 2008 through the first half of 2010. That has been reflected in a decline in the Chicago Board Options Exchange volatility index, also called the VIX, which last month fell to its lowest level since July 2007.
The declines in volatility and volume have been bad news for high-frequency traders, whose strategies generally rely on squeezing profits out of the tiny differences between the buy and sell orders of stocks within a fraction of a second. High-frequency traders also act as liquidity providers in the market, often taking the other side of a trade from long-term investors.
Rosenblatt Securities Inc. estimates that high-frequency traders would have made, on average, five cents to 7.5 cents per 100 shares traded in the U.S. stock market in 2010. That is down from 10 cents to 15 cents per 100 shares in 2008.
Lets make this clear to the newbies or experienced traders that are losing most of the time and blaming the HFTs.
HFTs are not the reason you are losing more than half the time, the reason is bcuz YOU don't have a strategy that works in the market you are trading.
3rd Party vendors are an absolute waste of money, PERIOD....NO EXCEPTIONS !! Any fool who spends money on them deserves to have their wallet raped....TWICE !
HFTs are not the reason you are losing more than half the time, the reason is bcuz YOU don't have a strategy that works in the market you are trading.
3rd Party vendors are an absolute waste of money, PERIOD....NO EXCEPTIONS !! Any fool who spends money on them deserves to have their wallet raped....TWICE !
Quote from zdreg:
these complainers will miss the liquidity. who is going to be on the other side of their crap trades?
MARKETSMAY 5, 2011
Traders Exit High-Speed Lane
Firms Reduce Use of Computer-Driven Strategies as Volatility and Volume Wane
By TOM LAURICELLA
When stocks collapsed in a free fall last May, the fear was that the market had been taken over by high-speed computers that had run amok.
A year after the "flash crash," which saw the Dow Jones Industrial Average plunge 600 points in less than 10 minutes, the stock market is a much quieter place.
Companies that use fast-trading, computer-driven strategies, which were painted by some as culprits of the collapse, have curtailed trading. So, too, have many long-term investors, for whom the trauma of that May 6 afternoon was the final straw after a decade of stock-market turmoil. In their absence, trading volume and volatility have plunged, further deterring high-frequency traders.
High-frequency strategies "have less to work with, so they don't participate, which creates less volume," said Will Mechem, a managing partner at high-frequency trading firm Pan Alpha Trading. "This would seem to be a vicious cycle."
Associated Press
Arthur Andrews, of Banc of America Specialists Inc., on the floor of the New York Stock Exchange on May 6, 2010, during the 'flash crash.'
Read More
Mini 'Crashes' Hit Commodity Trade
In the first four months of this year, average daily trading volume of stocks listed on the New York Stock Exchange and Nasdaq Stock Market is down 15% from 2010's pace, running at an average rate of 6.3 billion shares a day. Volume has been edging lower throughout the year, with April's daily average of 5.8 billion shares marking the slowest month since May 2008.
"The ripple effects across trading from the lack of fundamental demand are very real," said Jose Marques, global head of electronic equity trading at Deutsche Bank AG.
Volume had marched higher for most of the last decade, escalating during the financial crisis. It doubled between 2006 and March 2009, when an average of nine billion shares changed hands every day.
A big reason for the decline in volumes has been a general quieting of the big swings in stock prices commonly seen from 2008 through the first half of 2010. That has been reflected in a decline in the Chicago Board Options Exchange volatility index, also called the VIX, which last month fell to its lowest level since July 2007.
The declines in volatility and volume have been bad news for high-frequency traders, whose strategies generally rely on squeezing profits out of the tiny differences between the buy and sell orders of stocks within a fraction of a second. High-frequency traders also act as liquidity providers in the market, often taking the other side of a trade from long-term investors.
Rosenblatt Securities Inc. estimates that high-frequency traders would have made, on average, five cents to 7.5 cents per 100 shares traded in the U.S. stock market in 2010. That is down from 10 cents to 15 cents per 100 shares in 2008.
Looks like the HFTs have sucked most retail traders/investors dry, or perhaps they now realise its very difficult to beat the HTFs, so they are staying away from the market.
Quote from southbeach4me:
Lets make this clear to the newbies or experienced traders that are losing most of the time and blaming the HFTs.
HFTs are not the reason you are losing more than half the time, the reason is bcuz YOU don't have a strategy that works in the market you are trading.
3rd Party vendors are an absolute waste of money, PERIOD....NO EXCEPTIONS !! Any fool who spends money on them deserves to have their wallet raped....TWICE !
Some strategies require liquidity, and by liquidity I don't mean market makers or bots (yes it matters).
Quote from trickshot:
Looks like the HFTs have sucked most retail traders/investors dry, or perhaps they now realise its very difficult to beat the HTFs, so they are staying away from the market.
if you have proof they sucked the retail trader please provide
it
.
the losing traders on yahoo finance blame the short sellers.perhaps the losing traders on ET blame the high frequency traders for their short comings.
Quote from Bob111:
http://www.elitetrader.com/vb/showt...5248&perpage=6&highlight=cgarcia&pagenumber=2
just like achilles28 said-not easy, but it's possible. most people are not committed and not patient enough. 99% of them are undercapitalized..
Are they so undercapitalised ?? EMG -who seems to enjoy hammering the same message post after post- writes about 5000usd accounts but I read that IB average account is 150K. Many serious retail traders must have an account way larger than 150K. And what about the longer term investors ? They need to be well in the 7 digits to make a living and they are out there.
With 5K savings I would be afraid not to survive a single week in the world, so I'd agree it's way undercapitalised to trade stocks.
Quote from luisHK:
Are they so undercapitalised ?? EMG -who seems to enjoy hammering the same message post after post- writes about 5000usd accounts but I read that IB average account is 150K. Many serious retail traders must have an account way larger than 150K. And what about the longer term investors ? They need to be well in the 7 digits to make a living and they are out there.
With 5K savings I would be afraid not to survive a single week in the world, so I'd agree it's way undercapitalised to trade stocks.
you contradicting to yourself in this post. serious-that's the key word..they not a newbees and not undercapitilized. i'm referring to 99% of "traders" who are either trying to trade forex with 2-5K or futures with 10K max...they will lose and will be out of the game before they can realize their own mistakes.OP statement(and everybody else in those links above) is that there is impossible to win in daytraiding. the only difference is that OP is saying -that it is impossible because of HFT. i disagree with him and my proof is saying same. i have my brokers statement, OP-only words and assumptions on kindergarten level. like i said-i'm not even sure,who is he trying to convince? himself? or newbees? or somebody else? what is the point of this nonsense conversation,if OP have no clue what he was talking about?
i've just re read OP's first post once again and i do agree that it would be nearly impossible for newbie to win,if he falls into OP's description of small retail trader. newbie have to adapt,learn as much as possible,if he wants to beat the "house"..but same thing applies to any field in small business. and success rate is probably same.