Will the HFT algorithms and AI based trading software be available to retail traders ?

T

traderwald

Hi guys,

Will the HFT algorithms and AI based trading software be available to retail traders ?

If so what would that mean to retail trading ? How would retail trading be influenced by the AI ?
 
"AI" can mean most anything. I'm sure there's already snake oil (I mean software) calling itself "AI" available to retail traders. If retail traders had true HFT algos, then HFT's edge would disappear almost overnight. The big players wouldn't want that to happen...
 
etrades said:
Hi guys,

Will the HFT algorithms and AI based trading software be available to retail traders ?

If so what would that mean to retail trading ? How would retail trading be influenced by the AI ?
More...
So HFT stands for "high frequency trading". There's generally no secret "algorithm" to it, there's expensive microwave links between exchanges (because electromagnetic waves travel faster in air than in fiber) and expensive imbedded programming directly into hardware. It's kind of one of those "if you have to ask then it's not ever gonna be you" kind of things.
And "AI" is a completely undefined word that's effectively meaningless. There are folks programming complex software that can find and exploit various correlations. That's not AI, that's a lot of very hard work by a lot of very talented folks all working together and all being paid a lot. Two Sigma has already open sourced a bunch of the software they use, you can grab it all here https://opensource.twosigma.com/ including one with the "AI" label. Obviously the software is meaningless in the hands of someone who doesn't know how to use it, and again "if you have to ask...."
 
There is OpenHFT, Hummingbot (for crypto), and probably a few others, and there will only be more of such open source software for retail traders. So why aren't you using them?

Though there is plenty of software NOT available to retail traders and not making big money or sometimes losing money, just like Interactive Brokers' Timber Hill division that was losing money and then sold. HFT shop Trading Machines is well known as well. So what can their software do for or to retail traders, when it couldn't do anything in the hands of experts?

And what retail traders can do with software that requires $million dollar infrastructure and a team of mathematicians, physicists and technologists, who still lose money and close the door?

The ones that make money, like Citadel, buy order flow from brokers and may need retail traders to make money.
While the ones in business of actual trading are called hedge funds and don't need HFT.
And here is someone who is suing "AI" for losing $20M of his money:
https://www.fa-mag.com/news/who-to-sue-when-a-robot-loses-your-fortune-44695.html
 
guru said:
There is OpenHFT, Hummingbot (for crypto), and probably a few others, and there will only be more of such open source software for retail traders. So why aren't you using them?

Though there is plenty of software NOT available to retail traders and not making big money or sometimes losing money, just like Interactive Brokers' Timber Hill division that was losing money and then sold. HFT shop Trading Machines is well known as well. So what can their software do for or to retail traders, when it couldn't do anything in the hands of experts?

And what retail traders can do with software that requires $million dollar infrastructure and a team of mathematicians, physicists and technologists, who still lose money and close the door?

The ones that make money, like Citadel, buy order flow from brokers and may need retail traders to make money.
While the ones in business of actual trading are called hedge funds and don't need HFT.
And here is someone who is suing "AI" for losing $20M of his money:
https://www.fa-mag.com/news/who-to-sue-when-a-robot-loses-your-fortune-44695.html
More...

Agree with all this, but on the whole most hedge funds don't even beat the market. So HFT really is the best weapon of well-capitalized firms. And it's entirely possible that some of the funds (cough, Renaissance Technologies) could be using HFT to sweeten their returns.
 
Good to see I'm not the only 1 who hasn't fallen for this so called "AI" it's bogus big time.

HFT needs infrastucture mainly really fast network access to the exchange, the software isn't a big deal, it's the milliseconds.
 
The question is that is it useful to you? Does it really save your time etc?
Dont get carried away by the buzzwords. It is known that more than half of AI companies are just empty vessels with big noise.
 
Just apply the common sense test on this one. If thousands of retail traders could get the software (and speed) to make money alongside the big HFT traders, then who would take the other side of the trades? The remaining retail traders who hang out in chat rooms or follow some "guru"? They'd quickly find out about the mass-marketed software, too, and start using it. Then what?
 
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