Enough Whining about HFT. Start Connecting the Dots

Written by Michael Bigger. Follow me on Twitter.

 

 

Which investing group do you belong to?

  

• Technical 

• Value 

• Momentum 

• Algorithmic Trading 

• Day Trading 

• Swing Trading 

• Follower (Social Media Trading) 

• High Frequency Trading (HFT) 

• Zero Beta/Pairs Trading 

• etc.

  

I am puzzled why so many investors put barbed wire around their activities. These days, you hear plenty of investors whining about HFT. At other times, people complain about others using different strategies. 

I think all of that is a pure waste of time and money. What if you decided to learn more about the other methods? What if you combined the best from every group and came up with something different that is not so easily replicable? 

 

Example: A technician could investigate zero beta charts. Looking at a stock chart that excludes the market could reveal some new insights. How different would charts look from that perspective? Is there something to gain or to learn? 

 

At Bigger Capital, we will use anything worthwhile that can make us money. We are not married to only one way of making money. We investigate and experiment with all these methods. Usually, this is a waste of time. “Occasionally, though,” as Frank Oppenheimer said, “something incredibly wonderful happens.”

 

What do you think?

Comments

[chicagosean]

Totally agree. HFT isn't going away. And wishing it weren't there isn't going to put trading profits back in your account.

There is no way a human trader will be able to compete with HFT in speed or processing. But that's ok....what the hell are you fighting for pennies for anyway? Traders need to adapt to longer timeframes. I see all the shenanigans taking place all day everyday... but it doesn't effect my trading strategy or results in the least.

So you're complaining your bids or offers are always getting front-ran? Well, guess what....maybe you need to buy on the offer and sell on the bid - like the old days. Only now, the spreads are much thinner. And going back to timeframes - the longer out your timeframe, the less it matters whether you bought on the bid or paid the spread. It becomes inconsequential.

When I say "you" - mean, the traders that are complaining about this. Not YOU, Michael ;)

[Michael Bigger]

Thanks Sean. Exactly, most HFT are market makers on steroids making tiny spreads on huge volume. I always put my orders in the market "hidden" and many other traders do. I have a problem with all this if my broker or the Exchange disclose my hidden orders to other firms.