Comments on: Beat high-frequency trading machines by not playing their game http://blogs.reuters.com/reuters-wealth/2011/08/29/beat-high-frequency-trading-machines-by-not-playing-their-game/ Fri, 05 Dec 2014 11:27:18 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: alejandrorey http://blogs.reuters.com/reuters-wealth/2011/08/29/beat-high-frequency-trading-machines-by-not-playing-their-game/comment-page-1/#comment-8979 Mon, 16 Jan 2012 17:46:28 +0000 http://blogs.reuters.com/reuters-money/?p=19101#comment-8979 John Wasik is 100% correct when his comments are viewed in terms of day traders. These guys will get kiled when trying to compete with HFT systems. Colocation, Direct Market Feeds, Microsecond Latency, sophisticated algorithms executed in millionths of a second – there’s no way a day trader can be successful except by blind luck. Looking at a screen and applying tried and true Technical Analysis and then deciding to make a trade will be based on old information and the market will have moved – driven by HFT systems.

It is amazing how many firms are trying to sucker newbies in with the promise of get rich schemes through day trading.

In today’s environment, Value Investing for the intermediate and longer term (read trend trading) is the most like avenue to success. Technical Analysis can be applied successfully – just don’t think that as a neophyte day trader you can use these techniques to beat the system.

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By: Ruixing http://blogs.reuters.com/reuters-wealth/2011/08/29/beat-high-frequency-trading-machines-by-not-playing-their-game/comment-page-1/#comment-8596 Wed, 19 Oct 2011 20:29:15 +0000 http://blogs.reuters.com/reuters-money/?p=19101#comment-8596 For practitioners, manager, investors and regulators interested in more information about high-frequency trading, there is a conference coming up, High-Frequency Trading Leaders Forum, in Singapore (this is November 21-23), Hong Kong (December) and Sao Paulo (February 2012). More details: http://www.hftleadersforum.com.

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By: Johnnyw http://blogs.reuters.com/reuters-wealth/2011/08/29/beat-high-frequency-trading-machines-by-not-playing-their-game/comment-page-1/#comment-7963 Thu, 15 Sep 2011 02:38:48 +0000 http://blogs.reuters.com/reuters-money/?p=19101#comment-7963 I would like to know how I can see HFT when looking at the “tape”. What would it “look” like? I am wondering if an endless stream of 100 share lots has anything to do with it. The lot size in a few stocks I was watching, oil stocks, remained as if stuck on 100 share lots.

I also wonder if the price can be manipulated with HFT, that is, can the price be inflated to cause buyers to think there’s a move–in the latest cases, a bottom at last reached–so they will jump in … and be preyed upon.

I appreciate the article, but the typical mainstream advice about diversity and dividends, while generally true isn’t enuf for me, because I keep thinking certain instant drawdowns I have gotten recently were casued by HFT–if not my own bad timing, and own’s timing is doomed up against this game… Any info : TIA !

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By: Southland http://blogs.reuters.com/reuters-wealth/2011/08/29/beat-high-frequency-trading-machines-by-not-playing-their-game/comment-page-1/#comment-7832 Tue, 30 Aug 2011 17:23:43 +0000 http://blogs.reuters.com/reuters-money/?p=19101#comment-7832 John
For the past 10 years, I have built relatively strong portfolios primarily incorporating tax free munis. Just about everyone I knew warned me about inflation and the potential damage to bond prices. I reminded them I am a long term investor and that my strategy is to hold bonds to maturity which provides reasonably assured streams of cash. I see nothing on the horizon to alter my views. I hold stocks of course but they are in a minor position so to speak. Re your article: I remember in the late 70’s when computer driven stock trading was under development, how unreal it was going to be in order to determine the real value of any stock or the market generally. I have wondered why not create two exchanges: one for long term investors and the other to satisfy traders?

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By: johnwasik http://blogs.reuters.com/reuters-wealth/2011/08/29/beat-high-frequency-trading-machines-by-not-playing-their-game/comment-page-1/#comment-7828 Tue, 30 Aug 2011 13:03:29 +0000 http://blogs.reuters.com/reuters-money/?p=19101#comment-7828 I have nothing against bonds! I just wanted to sound the alarm for stock investors thinking that they had any advantage in the current environment. Yes, holding bonds to maturity is still a good idea.

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By: BairRightOnBear http://blogs.reuters.com/reuters-wealth/2011/08/29/beat-high-frequency-trading-machines-by-not-playing-their-game/comment-page-1/#comment-7825 Tue, 30 Aug 2011 01:28:53 +0000 http://blogs.reuters.com/reuters-money/?p=19101#comment-7825 John, I think you despair of traditional investors “beating” high-frequency trading (HFT) too quickly.

Longer-term investors can exploit behavioral errors and biases in the market. They can buy overly hated stocks cheap, or short overly loved stocks. Classic paper on the subject:
http://www.fullerthaler.com/downloads/bf soa.pdf

Speaking of biases, your own toward stocks shows through when you think up reasons to buy dividend-paying stocks. HFT can trade those, too. Bond investing provides dividends, too, and municipal bond income is tax-free, an even better tax rate than the soon-to-die 15% dividend tax rate. Individual investors can skip the HFT-tainted equity markets altogether and buy individual bonds, whose over-the-counter market means HFT is almost impossible to implement. A low-cost bond mutual fund or bond ETF would accomplish much of the same strategy.

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