I see sudden spikes in the price at specific times, market shooting up or down at the open and remaining flat for most of the day, or market not moving at all since the open until the very last minute end of day. Curious to know whether this is entirely due to activity by algo bots reacting to signals like data from news broadcasts or economic authority?
Is the market traded by humans anymore?
- Thread starter nxt7
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Liquidity on individual stocks is terrible. You don't get to see the true market due to internalization and dark pools. It feels like it can't get much worse to me, but I'm sure it will. Thanks HFTs for making the market so "efficient and liquid"!
To answer your question, I don't think it is knowable what makes the market move on an intraday basis.
To answer your question, I don't think it is knowable what makes the market move on an intraday basis.
Depends on which market you're talking about. I read in a financial magazine last year algo's can be involved anywhere from 50% to 90% on any given trading day or at any specific time...most of the time they are fighting each other.
Also, there are more different types of algo's than just those reacting to news and economics.
You also mention you see these spikes (volatility) at specific times...most likely due to schedule events.
That's good. Many don't see them at all and you can use that to your advantage because knowing when the volatility will be arriving on certain trading days can be a good thing although you won't know which direction the price action will be going. It's a good thing because volatility brings trade opportunities whereas markets with very little movement remains flat as you stated.
You just need to know when to expect that volatility on certain days. Thus, no need to know it for every trading day as if you must trade every day.
Suggest pink sheets / BB if you can stand it. They still trade semi human
A few years back I read the exchanges in Asia had this big fear of being hit heavy with algorithms...they decided to change some rules involving HFT, algorithms and such so that they do NOT become a dominating force at the exchange.
Thus, that was a few years ago and if they are currently sitting about 80/20 ratio as you stated...whatever rules they adopted seems to be working.
