High Speed Trading Unfair To Retail Traders

Nice links thx

"The bottom line is that with a pre-trade environment, the sponsored access providers will be able to have the potential to front run all those who use their platforms. "

haha... next

GS:
"As the SEC also seeks to appease investor concerns over rampant short selling, especially naked short selling, new sponsored-access standards may provide part of the solution. Given that day-traders may be the last remaining culprits of such activity,, increasing and standardizing scrutiny over their trading may reduce uncovered (and illegal) shorts even further."

waaaooo Where has gone the pionnier spirit... Arrgocance leads always to the same result... Downfall...

"The mother of all concerns is a sponsored firm's algorithm going awry and executing thousands of problematic trades across a range of securities and market centers"

Personnally it could be the dream... very wild ! What can happen if the pramater of trading field change by huge order of magnitude brievely and how will all the algos adapt ?

"otherwise, the next “Long Term Capital” meltdown will happen in a five-minute time period."

hmmm...
 
Quote from OldTrader:

After you've been trading a while you eventually learn the lesson that you have to play a game where you maximize your strenghts and minimize your weaknesses.

As a retail trader your strength is never going to be 1) speed of execution or 2) cost of execution. Therefore, if you're playing this game you're going to lose.

What retail traders need to learn is how to identify the conditions that lead to large, more substantial moves that don't require speed of execution to participate in, and don't require extremely low cost to profit from.

OldTrader
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+1
Good advice.
 
Quote from risktaker:

No. Because no matter if you're short or long term oriented, you're being scammed.

Among the 1st things that ought to be changed is these order flashes & the ability to post fake bids/asks as well as this "colocation" BS. Another possibility is raise their SEC fees by 2-3 times the current rates. Maybe that might slow down the thivery.
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the congress of the US will be happy to hear from you. now we have a "trader" who believes in a transaction tax.
 
Quote from OldTrader:

After you've been trading a while you eventually learn the lesson that you have to play a game where you maximize your strenghts and minimize your weaknesses.

As a retail trader your strength is never going to be 1) speed of execution or 2) cost of execution. Therefore, if you're playing this game you're going to lose.

What retail traders need to learn is how to identify the conditions that lead to large, more substantial moves that don't require speed of execution to participate in, and don't require extremely low cost to profit from.

OldTrader
More...

+100
 
Didn't Paul Rotter make a fortune with a "manual" version of this technique several years ago? I don't think he's in the game anymore, but perhaps someone can shed more light on his strategy...

Walt
 
In the NYTimes article I found a quote that I find somewhat disturbing:

" a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee."

Does this really mean that Nasdaq is "selling" information on my order before it hits the orderbook? That would be outrageous.
 
That is a very, very good question. I would like to know the truthful answer to this also...
Best
john



Quote from vikana:

In the NYTimes article I found a quote that I find somewhat disturbing:

" a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee."

Does this really mean that Nasdaq is "selling" information on my order before it hits the orderbook? That would be outrageous.
More...
 
The reason this is bad is because the markets are a zero sum game, with the exception of commissions. The small leak of commissions didn't hurt the game, but when a computer can make guaranteed profits, that blows a big hole in the dam.
 
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