Because HFT is secretive, stealthy, smart and relatively unknown, why pakistan military failed detecting u.s navy seal stealth blawk hawk helicopters entering pakistanis airspace? The answer is, pakistan lacked the stealth technology. You can relate that to retail traders. They lack in technology.
HFT vs Small Traders
- Thread starter emg
- Start date
That answer is the myth- hocus pocus I'm talking about. You haven't answered the question. How does high computing power beat a trader that holds trades for at least 2days. To make it simple lets not even consider 2 months. Try again. [/B][/QUOTE]
Can't you read!!!! HFT tends to be secretive, stealthy, smart and relatively unknown.
no wonder why 99% retail traders lose.
Another brain dead assumption by the MULE
There are many different categories of hedge funds from convertible arbitrage’, ‘short bias’, ‘global
macro’ and managed futures, etc. The most important category is missing! It is the category of
‘high frequency finance hedge funds’. High frequency finance managers use tick by tick market
data as an input to their statistically driven quantitative models. They use tick by tick data, not
only to optimise the timing of their trades, but also to generate the initial recommendation of their
trades.
Why is it necessary to create a separate category? The purpose of creating categories of hedge
funds is to make it easier to track the performance of a manager, a particular category and to
make peer to peer comparisons of different managers within one category.
Hedge fund managers using the methodology of high frequency finance have a very different risk
return profile to other hedge fund managers. In particular, they can build models that are far more
adaptive to changing market environments. Furthermore, their models have a much longer life
time than traditional models developed on the basis of low frequency data.
macro’ and managed futures, etc. The most important category is missing! It is the category of
‘high frequency finance hedge funds’. High frequency finance managers use tick by tick market
data as an input to their statistically driven quantitative models. They use tick by tick data, not
only to optimise the timing of their trades, but also to generate the initial recommendation of their
trades.
Why is it necessary to create a separate category? The purpose of creating categories of hedge
funds is to make it easier to track the performance of a manager, a particular category and to
make peer to peer comparisons of different managers within one category.
Hedge fund managers using the methodology of high frequency finance have a very different risk
return profile to other hedge fund managers. In particular, they can build models that are far more
adaptive to changing market environments. Furthermore, their models have a much longer life
time than traditional models developed on the basis of low frequency data.
In future, there will be a growing number of high frequency finance hedge fund managers, albeit
at a slow pace. Due to the high startup costs and the secretiveness of the high frequency hedge
fund managers progress will be slow. Their trading technology is so successful that they do not
have to do any active marketing and thus do not have to reveal any information to the outside
world. This has the effect that only a small group of insiders know about the technology. The
high frequency hedge fund managers enjoy their anonymity. They can take advantage of the calm
before the storm to enhance their competitive edge.
The unique risk adjusted returns of high frequency finance managers has the effect that the
managers are overwhelmed with demand. They are not able to absorb even a fraction of the
potential demand for their products. The existing players of high frequency hedge funds have no
interest in changing this. Will this ever change? Have the high frequency finance managers
merely discovered a few esoteric trading rules that are powerful but are limited in scope or does it
have the potential to become main stream? To answer this question, we have to make a step back
and try to understand our way of viewing the world. We have all been steeped in the history of
classical economics. This has shaped our view of what can be achieved with finance technology.
at a slow pace. Due to the high startup costs and the secretiveness of the high frequency hedge
fund managers progress will be slow. Their trading technology is so successful that they do not
have to do any active marketing and thus do not have to reveal any information to the outside
world. This has the effect that only a small group of insiders know about the technology. The
high frequency hedge fund managers enjoy their anonymity. They can take advantage of the calm
before the storm to enhance their competitive edge.
The unique risk adjusted returns of high frequency finance managers has the effect that the
managers are overwhelmed with demand. They are not able to absorb even a fraction of the
potential demand for their products. The existing players of high frequency hedge funds have no
interest in changing this. Will this ever change? Have the high frequency finance managers
merely discovered a few esoteric trading rules that are powerful but are limited in scope or does it
have the potential to become main stream? To answer this question, we have to make a step back
and try to understand our way of viewing the world. We have all been steeped in the history of
classical economics. This has shaped our view of what can be achieved with finance technology.