Two words: Donald Trump.
That's right. You open Twitter on your phone, search @realDonaldTrump, turn on notifications and be ready for every new Tweet he puts out. If a Tweet is business related you can bet your ass markets are reacting.
Each Tweet moves markets. You pick the right stocks to buy or sell and I can guarantee you that Ferrari you always dreamed of owning is now a reality.
Institutions with billions in assets already have algorithms that do this. You will never be able to humanly react as fast and it will be too late to capitalize on the move.
>Institutions with billions in assets already have algorithms that do this. You will never be able to humanly react as fast and it will be too late to capitalize on the move.
that is what a loser sounds like ladies and gentlemen
Are you co-located near the exchanges so that your algorithm can issue orders to the exchange in less than
I guess the only way to beat the institutions is if you are able to interpret Donald Trump better than institutions. Some are obvious; e.g. if Trump just says he's going to cancel the F-35 or something. Others might be too hard for algos to interpret properly.
This is a good idea.
>all price movement happens within seconds of news becoming public
algofags, when will they learn?
This should be the first response that enters your mind after reading that 15 year-old sounding post from OP. Kiddos who don't get this, please keep trading because banks need that easy money you're giving them.
nice shill d00fus
> algorithms that do this
Be you're the typical middle class pansy that talks shit about the gov, but jerks off the IRS man. You believe everything is already automated, computers are already taking care of things, and there is nothing you can do about it.
You're what's wrong with this world.
If you think you can beat bulge bracket banks at the HFT-aglo game then be my guest bud. But I think you're either niave or not educated on the subject.
You guys don't know how wrong you are. Read this:
You can hold a position for more than a few seconds you know?
> HFT-aglo game
Already done the research. These banks don't algo trade stocks on a massive scale as you think they do. They make it sound as if it's advanced futuristic AI make millions in a day technology, but it really is still baby technology still being nurtured.
Then it isn't HFT-algo trading which is what we're discussing here. Learn to fucking read. Nobody said you can't make money in the stock market, we're discussing whether or not it's economically wise to put time, money, and effort into building an algo that trades based off of the president-elect's tweets. Dumb fucking cunt.
> He’s convinced someone’s figured out an algorithm that’s faster than anything he’s ever seen before.
No evidence of such a bot.
Banks have been engaged in HFT since 1999, what the actual fuck are you on about? They've spent millions in R&D to make money with this shit. Go read Flash Boys and educate yourself bud.
>equedia.com
See for yourself just how fast trading algos are.
Ya. Sometimes I put my servers next to the stock exchange. You know pay massive amount of rent. Setup some CentOS servers with a few lines of Python to make changes and undercut everyone else. All I do is watch trends of people buying a stock, buy the stock, sell it quickly, and make a fraction of a cent. I do this millions of times throughout the trading day. Some people call me a genius.
Give me a server next to the stock exchange and I'll make a HFT bot myself. Shet.
You didn't even read the whole article. The trade was made in 1 second. There is no humanly way you could read the news, process it what it means for the market, come up with a viable options strategy, and place the order in that time.
You have no clue what you're talking about
>Reuters reported, the trade occurred 19 seconds before the tweet
it's you who should read it
how can humans even compete?
Humans can't compete in terms of speed or profitability. End of story.
Say you think stock ABC is underpriced relative to the valuation that you computed by hand and want to buy a few shares to make a profit as it will surely revert back to its valuation price. Let's say the shares are currently selling at $40.25 so you submit a buy order to your broker at this price and your order gets filled at $40.26.
In the grand scheme of things, this isn't really a big deal.
(back in the day before online brokerages, you could get filled a few dollars above what you submitted but spreads are tighter now)
However what really happened was that the HFT saw your buy order for $40.25, bought at $40.25 then filled your buy order at $40.26 scalping one cent (per share) on the order.
Now say you bought 1,000 shares, that's $0.01*(1,000) which is a $10 profit for the HFT. Think about the fact that this happens a few thousand times a day and it's usually more than 1 cent and you'll realize quickly the incentive banks have to further fund HFT.
Also keep in mind that their are algos that track big banks algos so when the bank's algo sells shares short, all of the tracking algos also sell short. This causes what is known as a "flash crash" which can wipe out a persons account in a matter of microseconds.
For examples of this happening in real trading situations, check out this link:
>nanex.net
Sounds like total fucking bullshit to me
Not all market reaction happens in the 0.5 seconds after something happens, does it?
You fucking morons
>youtube.com
Watch this video. This all happened in 7 seconds. Think about what that means for your average "day-trader" with less than $25k in capital...
Also, 1 point = $50 per contract.
This algo traded 52,000 contracts in 7,000 trades with a 25 point spread during this video. You do the math.
Thank you for sharing that it was a real eye opener.
Just set a fucking limit order. Hfts are setting limit orders to buy at 40.25 in your example
So if you calculate the stock's value to be $50 per share and it's trading at $40.25 per share then you're going to place a limit at $40.26 and miss out on $10 of potential upwards price movement? Your average investor is not going to do this because they don't notice or care about a few cents.
Also keep in mind that usually 1/1000th or 1/10000th of a dollar is scalped so you can't place a limit order at $40.2599, you can only place at $40.25 or $40.26, so you're order will still be front-ran and fractions of a dollar scalped.
Also keep in mind that HFTs are usually the ones filling your order since you can't pick what exchange (IEX, BATS, etc.) your order is filled on.
Not even considering bots, its just how random it all is.
>"omg Trump won stocks will go down"
>stops go up
If I had to guess, stocks will go down after he gets ellected and proves he is a meme, gold and bitcoin to ATH
Oooh, so so close. You're almost there, buddy, I know you can do it!
>and one second after a headline appeared on the Dow Jones Newswire.
Sure I don't. Did I not put enough buzzwords?