Wednesday, October 10, 2012

The Dirty Tactic Of HFTs

Below is a link on how HFTs took advantage of their speed to slows down the quote feed to others.

To regulate HFT, S.E.C. turns to one of them.

Is that Cheating?

HFTs can get away with murder at the moment, Exchanges welcome them as they provide huge growth to the trading volume, giving them fantastic volume rebates as well as the edge in the speed of execution.

Of course there are still traders like Coconut who are still able to stand up to the HFTs, my respect to them.

As for my beloved Simsci and Tw contracts, HFTs have murdered many of my fellow traders there, some too slow to run away and the rest stubbornly stayed on to fight the monsters.



coconut said...

ya, i had experience many times, i don't really know what but some kind of "dark pool" operation where you don't see in the order books. but once you throw in the order they "disappear", order after orders they just disappear meaning there is a large order there but you can't see it.

but honestly, i don't care, i just follow my book and my play.

coconut said...

and for HFT, i'm not against them or approve them partly becos i don't really know how they operate and most of all, whether they are here or not certainly they have not affact my operations (yet).

trading to me is the fittest survive game. traders mind must always be in working condition, always look out for better ways to trade even if one is already making money and not just sit there comfortably collecting one cheque.

thats why i say trading is a minds game rather than a strategy game where many had misunderstood.

coconut said...

and on the "scary" subject on average losses (bad trades), i had many thing to say about it but not sure enough time.

personally, i do average my trades, in fact most of the time i love to average losses especially i want to get into a hedge or spread positions.

and if that fail, i have a limit to my individual position size, and if that fail i have an overall limit to the overall portfolio size. and if that fail, i have a cut loss to the entire portfolio if it fall to a certain %.

on top of that i don't use much leverage. its enough to safe guard against busting the entire account.

coconut said...

and just like trend and counter trend strategy which both will work in their respective conditions, average winner and average loser works the same way.

so for simplicity i say this,

if you trade counter trend, better start working on your trend following skill. and if you only know how to average loser, its time to learn how to average winner as well, you have to.

otherwise, like fat mentioned, your winners will not be able to cover your losses when you do averaging.

Fat88Trader said...

No Leverage? then quite safe.

coconut said...

some leverage but very low. usually i trade i take into account the contract size, in that case i know my leverage point.

eg, Simsci, thats SGD70,000, i know straight away my position limit.

rbt said...

Did anyone take the poll on the 3rd link? The one about do we consider queue jumping as cheating. 3% of those polled felt that it was not cheating.

How i wish i can jump queue.