14 comments

[. ] The secrets of high frequency [. ]

Excellent article. I congratulate Mr Kamerei on providing a very clear explanation of what high frequency trading actually is and how it works.

Anyone who is asking the question do HFTs serve a purpose? should read this article.

Great use of analogy too, really helps to clarify the issues.

A very fine article. I have always disliked HFTs having the possibly misguided opinion that they are pinching pennies from the average investor. Maybe they are in fact not that bad

Impressive article explaining HFT, although it would help me and the general public, lawmakers, and the mainstream media if was explained more in plain English.

I fear that many want HFT abolished or taxed out of existence not realizing very long-term buy and hold investors will have annual yields reduced as some estimate as much as two or three percent with a tax and resulting increased spreads and put most short-term or human traders out of business.

[. ] The secrets of high frequency trading.  (All About Alpha) [. ]

The author writes this article as though HFT is a needed spoke on the wheel of markets. In reality the spoke is now the wheel and the wheel is now a rectangle.

Our markets are no longer properly functioning markets. The life cycle of an entry onto our markets should be:

(1) Initial Public Offering

(2) Company Growth

(3) Job Creation

(4) Investor Participation

(5) Overall Economic Growth

Where does the HFT guru or author mention any of these factors? In fact, if you look at each one of these factors, since the creation of HFT, every listed factor is in a negative stage of existence.

It is obvious that the current structure of our markets is not working. 3% rises and declines on a daily basis is not something that investors will stomach. Without investors, the markets are just HFT playgrounds. This is what we have and the SEC needs to address this. The problem is not HFT, the problem is that the SEC has enabled a structure that allows them to exist and profit such as they do.

Wake up SEC, your markets are no long functioning properly.

[. ] The Secrets of High Frequency Trading | AllAboutAlpha: Hedge Fund Trends & Alternative Investmen. Like this:LikeBe the first to like this post. [. ]

@#7

Volatility created by HFT? During the Great Depression the average monthly range was +20% to -20%. Should have been HFT back then for less volatility.

HFT created negative impact on your (1)-(5)? All of a sudden HFT was born the day after the bull market ended March 24, 2000? The tech and dot com boom is over. The government artificially created a housing bull market to take its place and ended in failure and the economy we have today.

[. ] in telecommunications, computing capacity and financial software platform capabilities have seen huge growth in the field of High Frequency and Algorithmic Trading (now accounting for over 70% of all equity trades placed on US exchanges and in excess of 77% in [. ]

[. ] The secrets of high-frequency trading [. ]

impressive article. Im a HFT and all he said is that HFT are making markets. With like a dozen exchanges there is definitely a need for market makers.

The $21billion profit figure seems way too high. That is not made from high frequency trading.

its not that hard to trade by automated system with high frequency. it is simply necessary to find an edge and use it over and over again. even if the chance of profit would be 51% + commisions. then system can be used live

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