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  • The Holy Grail Of Trading Has Been Found: HFT Firm Reveals 1 Losing Trading Day In 1238 Days Of Trading

    From zerohedge.com

    Think JPM's 0 trading day losses in 2013 was impressive? Prepare to have your mind blown. The chart below shows the chart of daily net trading income by High Frequency Trading titan Virtu, taken from its just filed IPO prospectus. The punchline: in 4 years of trading Virtu has had one, one, day in which it lost money. From the S-1: "The chart below illustrates our daily Adjusted Net Trading Income from January 1, 2009 through December 31, 2013. As a result of our real-time risk management strategy and technology, we had only one losing trading day during the period depicted, a total of 1,238 trading days. " Let that ... (full story)

  • #1
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  • Mar 10, 2014 6:35pm Mar 10, 2014 6:35pm
Disgusting is the word. HFT needs to be illegal asap!
  • #2
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  • Mar 10, 2014 6:53pm Mar 10, 2014 6:53pm
Forex is not a zero-sum game at all. You have to eliminate HFTs from the equation and you have worse chance to "win" in forex than at slot machines.
  • #3
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  • Mar 10, 2014 7:19pm Mar 10, 2014 7:19pm
Quoting Spik
Forex is not a zero-sum game at all. You have to eliminate HFTs from the equation and you have worse chance to "win" in forex than at slot machines.

Spik, could you elaborate on your belief that HFTs actually moderate price movement to a degree that retail investors can make money from the market. Fwiw, this is not the first time I have heard such a things, so I am curious.

I know SpreadBetter has mentioned he believed HFT algos provide unique setups for swing traders, but I've never heard as to why he believes that. Sorry Spread If I misquoted you, or misunderstood you. I do believe I am close though.

Thanks
  • #4
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  • Mar 10, 2014 7:30pm Mar 10, 2014 7:30pm
Not news, intraday scalps are mostly suicide now because HFTs dominate that space, its still possible for retail to make money, but they need to operate on a different time frame, away from the the shorter time frames.
"Where you want to be is always in control, never wishing, always trading.
  • #5
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  • Mar 10, 2014 7:31pm Mar 10, 2014 7:31pm
Read this

http://www.motherjones.com/politics/2013/02/high-frequency-trading-danger-risk-wall-street

and then

Read this

http://www.forbes.com/sites/steveschaefer/2012/08/02/knight-capital-trading-disaster-carries-440-million-price-tag/

and then think.. Is this really a holy grail?! Good things come at big prices.. When you think your smarter then the market well maybe it won't cost you $440 million dollars!
There are those who know, and there are those who don't know.
  • #6
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  • Mar 10, 2014 7:31pm Mar 10, 2014 7:31pm
The chart is almost meaningless. We don't know how many trades, how many pips, the size of the trades, the number of pips won/lost, size of spread, etc. The only thing we can really say is that they have a strategy(ies) that has a positive expectation and are running it. Who wouldn't?

As for Boon2, you'll note that Virtu has offices in Singapore and Dublin. Seems there are people on 3 continents willing to jump in this game.
  • #7
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  • Mar 10, 2014 7:57pm Mar 10, 2014 7:57pm
Quoting climber123
The chart is almost meaningless. We don't know how many trades, how many pips, the size of the trades, the number of pips won/lost, size of spread, etc. The only thing we can really say is that they have a strategy(ies) that has a positive expectation and are running it. Who wouldn't?

As for Boon2, you'll note that Virtu has offices in Singapore and Dublin. Seems there are people on 3 continents willing to jump in this game.
Just like the GFC, currency war's ect,ect started in US just like HFT that's lead by the FED no dough!
  • #8
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  • Mar 10, 2014 9:24pm Mar 10, 2014 9:24pm
  •  Trader#4B7C
  • | Status: Unregistered Trader
choke, choke, what a joke.

"This also explains why the gigaHFT firm has finally stepped out of the shadows and its founder and equity owners are finally willing to cash out - the music is slowly ending. Even for those who have discovered the Holy Grail of the New Normal market."

I learnt to trade before robot (or HFT) traders were heard of. stuff them all robots under water and see if they can swim or whether they gonna drown with sparks flying. They got no brains, man, like the algo computer programmers who write the algos. Nuf said, I trade for money. I always wondered why those computer programmers did trading courses with me when I was a rookie, now I know for sure.
  • #9
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  • Mar 10, 2014 9:37pm Mar 10, 2014 9:37pm
Forecasts and predictions are irrelevant. It's all done by HFT.
  • #10
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  • Mar 10, 2014 10:21pm Mar 10, 2014 10:21pm
HFT significantly shifts away the term "investing" from the stocks exchange. It's all gone to price movement - it have nothing to do with creating vestments by buying shares in a company. I'm still wondering why the financial media persistently calls "investors" or "investment funds" the bodies that speculate over the price of foreign currency, gold, stocks, real estate, etc. That is not investing - that is "I cheat you, you cheat me" - like those Gipsy dudes with the 3 cups and a small ball that try to get some pennies at the village rural festivals :-).
  • #11
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  • Mar 10, 2014 10:28pm Mar 10, 2014 10:28pm
it's always easier for the majority to blame someone else for not being as successful as they'd like to be. The average ratios of the extensions and retracements of market moves is unchanged over the last 3 years, 5 years, 10 years, 25 years, 50 years, 100 years etc. I.E.: market behavior has not changed! For me it goes deeper than stats -- my edge -- I have taught trading in live markets since '08 and have studied or traded markets since 1980 -- and I am still about as low tech as it gets. I LOVE this game!
  • #12
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  • Mar 10, 2014 10:52pm Mar 10, 2014 10:52pm
Hi Trout, I agree with that market has not changed. The game has changed a bit with the introduction of HFT. I have not paid attention to the market that long. Fundamental has less weight on the market. CB's have more power to control the market, so do MM's.

Low tech is not a disadvantage. In the hand of skillful trader, even paper and pencils can be powerful.

Successful traders stats is a bell curve tilted and shifted to the left.

I like your quote: "Want what the market wants". Cheers.
  • #13
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  • Mar 11, 2014 1:03am Mar 11, 2014 1:03am
I remember some news from last year about a pool of funds that trade automatically - they admitted the of lost 7bn in 3 years (the pool capitalization was about 100bn). So obviously is not all bells and whistles.

I think the impact of the electronic high speed transactions will always be somehow dampened by the intrinsic caution of the human nature. Putting all of your money into a financial rocket (it could make you rich or poor in matter of hours) is like accepting to ride on a plane controlled only by computer autopilot.
  • #14
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  • Mar 11, 2014 1:23am Mar 11, 2014 1:23am
Quoting boon2
Well US citizens vote these's criminal's in so their just as much to blame!
Elections in the US are ENTIRELY RIGGED. National elections are decided ahead of time. This was proven in several different ways in the last presidential election, and has been proven in preceding ones, too. The Supreme Court even intervened, and GAVE one Bush the office, a while back.

One group with VERY DEEP POCKETS, in control of politicians, withdraws reelection funds from any brave soul who even so much as HINTS of opposition to any part of the destruction being wreaked on the US - and heaps funds on the person running opposite that brave soul. Research Cynthia McKinney, and others.

The US is under the control of a hostile elite - what else could you call a group which votes in (because bought off) drone execution of American citizens anywhere - even domestically? Militarization of the police forces? Amnesty for tens of millions with unemployment through the roof? AND A TON OF OTHER HORRORS.
  • #15
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  • Mar 11, 2014 1:34am Mar 11, 2014 1:34am
Geez! Just mention HFT and traders (by the looks of it here) start scurrying around like roaches when the light is suddenly turned on!

Folks, HFT is obviously not brand new. This has been going on for some years already. Ok. So when, as a trader, did you suddenly see your chart go whacko in a millisecond, sending price way to hell and gone?

Never! Not once in all these years!

Like Trout said, the bigger picture remains unaffected. We remain unaffected. Our trading remains unaffected. And, there are already sounds in the wings about leveling restrictions on HFT traders, like having to hold a new position for a certain length of time before closing it. If that happens, it will be one big monkey wrench in the works of HFT.

The only objection we can have, even if HFT does not affect us, is that some folks are enjoying an unfair advantage in the markets. And it is for this reason only that we are beginning to hear sounds in the wings.
  • #16
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  • Mar 11, 2014 3:00am Mar 11, 2014 3:00am
Agree! US IS the cause to most of the problems in the world right now.
At least it needs to be chopped up into smaller pieces.
  • #17
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  • Mar 11, 2014 3:17am Mar 11, 2014 3:17am
Quoting extreme_one
Agree! US IS the cause to most of the problems in the world right now.
At least it needs to be chopped up into smaller pieces.
You think in terms of what wrong or right, that's very stupid, what matters is the US military and its power. Have your country take a fight with US and see it vanished.. always the strong will rule the weak.
  • #18
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  • Mar 11, 2014 3:47am Mar 11, 2014 3:47am
Quoting Trout
it's always easier for the majority to blame someone else for not being as successful as they'd like to be. The average ratios of the extensions and retracements of market moves is unchanged over the last 3 years, 5 years, 10 years, 25 years, 50 years, 100 years etc. I.E.: market behavior has not changed! For me it goes deeper than stats -- my edge -- I have taught trading in live markets since '08 and have studied or traded markets since 1980 -- and I am still about as low tech as it gets. I LOVE this game!
Once again Trout many thanks for your common sense based on your vast experience.I agree with your observations completely. Many thanks
Happy trading
  • #19
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  • Mar 11, 2014 4:11am Mar 11, 2014 4:11am
Quoting palabara
So your blaming a whole population of people, because it seems easier to just put everyone into one category and blame everyone instead of individually. You sir are NOT a stereotypical genius! You are the cream of the pie.

Of course the US people are not to be blamed, the Fed, besides owning the Forex game, owns the debt of the planet, it´s a private bank, and the universe thinks they are the US government.They are the Big Boys on top of the the big boys.
They own the money printing maschine and decide the money policies on closed doors.
Few months after the Lehman crisis, where the banks where struggling for survival, they came out with record profits...
They are the creators of the system, that lends money they don´t have, and charge interest for it...legally.
Us, and world tax payers pay the bill...Ever wondered why all the free world governments are in debt?
And, they love war, cause then the governments borrow more.
  • #20
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  • Mar 11, 2014 5:11am Mar 11, 2014 5:11am
Hahahaha. Yep I noticed that too. Very amusing. Good points well made btw.



Quoting traderathome
Geez! Just mention HFT and traders (by the looks of it here) start scurrying around like roaches when the light is suddenly turned on!

Folks, HFT is obviously not brand new. This has been going on for some years already. Ok. So when, as a trader, did you suddenly see your chart go whacko in a millisecond, sending price way to hell and gone?

Never! Not once in all these years!

Like Trout said, the bigger picture remains unaffected. We remain unaffected. Our trading remains unaffected. And, there are already sounds in the wings...
  • #21
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  • Mar 11, 2014 5:51am Mar 11, 2014 5:51am
The old adage springs to mind. If it sounds too good to be true......etc
  • #22
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  • Mar 11, 2014 6:20am Mar 11, 2014 6:20am
HFT is nothing more and nothing less than another animal in the FX ecosystem. Might be annoying for someone, but it has full right to live in this habitat, just like every other way of trading. But don't forget Darwin: adaptation is THE ONLY recipe for a long time success in the ecosystem (or market in our case).

Let's only hope stories like this won't prompt control freaks to start killing this market with suffocating regulation.
  • #23
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  • Mar 11, 2014 6:56am Mar 11, 2014 6:56am
Magnificent achievement.
Tracking the Specialists.
  • #24
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  • Mar 11, 2014 7:36am Mar 11, 2014 7:36am
Front running large money is always profitable!
HFT= Technological specialist
  • #25
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  • Mar 11, 2014 7:47am Mar 11, 2014 7:47am
Good post.


Quoting althar
HFT is nothing more and nothing less than another animal in the FX ecosystem. Might be annoying for someone, but it has full right to live in this habitat, just like every other way of trading. But don't forget Darwin: adaptation is THE ONLY recipe for a long time success in the ecosystem (or market in our case).

Let's only hope stories like this won't prompt control freaks to start killing this market with suffocating regulation.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #26
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  • Mar 11, 2014 8:21am Mar 11, 2014 8:21am
  •  Trader#52D4
  • | Status: Unregistered Trader
Quoting Trout
The average ratios of the extensions and retracements of market moves is unchanged over the last 3 years, 5 years, 10 years, 25 years, 50 years, 100 years etc. I.E.: market behavior has not changed!!
market moves are not enitrely unchanged over those years... 6 May 2010 was a first of its kind flash crash and since then many others have occured
  • #27
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  • Mar 11, 2014 8:43am Mar 11, 2014 8:43am
Apparently some here have missed news re Russia causing some problems. Also Muslims. Or on smaller scales the internal problems in Italy, Greece, etc.

There was an article where someone was proposing discrete time units for trades to be executed. It was supposed to reduce HFT profitability by clustering trades at one price for each time but was still talking about periods like 1/100 second. Maybe if it was a few seconds being as long as it takes a retail trader to say "Oh crap" and reverse the trade.
  • #28
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  • Mar 11, 2014 9:14am Mar 11, 2014 9:14am
Quoting climber123
The only thing we can really say is that they have a strategy(ies) that has a positive expectation and are running it. Who wouldn't?
Exactly. You wouldn't expect an HFT system to have losing days. That would be like a losing year for us normal frequency traders. It's merely a statistical outlier. It must have had them worried though!
  • #29
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  • Mar 11, 2014 9:26am Mar 11, 2014 9:26am
Quoting gat
Apparently some here have missed news re Russia causing some problems. Also Muslims. Or on smaller scales the internal problems in Italy, Greece, etc.
Apparently nearly all the world and everybody cause problems. Let me tell you, it's not others cause them. It's you within yourself. Look at you. Do you cause any problems? Drink and drive, skip homeworks, etc.

It's not the world dislikes you, but you dislike the world.
  • #30
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  • Mar 11, 2014 9:31am Mar 11, 2014 9:31am
Praise be to Allah . LOL
practising coitus interruptus
  • #31
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  • Mar 11, 2014 3:00pm Mar 11, 2014 3:00pm
Oh and before blowing off too much steam through the ears it might be worth taking a quick look at Virtu's site to see what they actually do, does it actually marry up with the article?

http://www.virtu.com/market-making/
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #32
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  • Mar 11, 2014 5:10pm Mar 11, 2014 5:10pm
Quoting Spreadbetter
Oh and before blowing off too much steam through the ears it might be worth taking a quick look at Virtu's site to see what they actually do, does it actually marry up with the article?

http://www.virtu.com/market-making/

market makers still take on inventory risk.
  • #33
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  • Mar 11, 2014 6:45pm Mar 11, 2014 6:45pm
Sure, but ZH has chosen to be sensationalist ignoring the full workings of Virtu and its value.


Quoting JeremyWS
market makers still take on inventory risk.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #34
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  • Mar 11, 2014 6:57pm Mar 11, 2014 6:57pm
Quoting Spreadbetter
Sure, but ZH has chosen to be sensationalist ignoring the full workings of Virtu and its value.
its ZH...

still doesn't take away from the fact they barely made a loss... And they do run risk so...
  • #35
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  • Mar 11, 2014 7:03pm Mar 11, 2014 7:03pm
Is there any data available on how much they actually made from actual trading, versus their other activities, is it in the full prospectus?
  • #36
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  • Mar 11, 2014 7:34pm Mar 11, 2014 7:34pm
Quoting Squeeze
Is there any data available on how much they actually made from actual trading, versus their other activities, is it in the full prospectus?
read the title of the graph on ZH article...
  • #37
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  • Mar 11, 2014 7:40pm Mar 11, 2014 7:40pm
It must be late and I must be tired but I'm a little confused by it...

WAS confused, I'm there now

Quoting JeremyWS
read the title of the graph on ZH article...
  • #38
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  • Mar 11, 2014 8:37pm Mar 11, 2014 8:37pm
Quoting Spreadbetter
Oh and before blowing off too much steam through the ears it might be worth taking a quick look at Virtu's site to see what they actually do, does it actually marry up with the article?

http://www.virtu.com/market-making/
With the introduction of HFT into the market, it creates some sense of disadvantage to some traders. Whether this is true or not, it's different story.

I read an article that trading companies in the same building install the same length of wires from the mainframe to the companies' server so that data is transmitted in abt the same time from the mainframe to companies' server.

One of the advantage of using HFT is traders cannot be charged with unfair trading practice such as insider trading, etc. If a trader does the same as HFT i.e. Losing only 1 Trading Day In 1238 Days Of Trading, they will be investigated and maybe charged with unfair trading practice.

Well, with HFT, they, the investigators, cannot charge it, because it is no human.
  • #39
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  • Mar 12, 2014 1:27am Mar 12, 2014 1:27am
Can't disagree with any of that but the overall point I was making when providing the link is that this company is so much more than just a straightforward HFT company. The layers of sophistication to their business model is immense.


Quoting frx_trader
With the introduction of HFT into the market, it creates some sense of disadvantage to some traders. Whether this is true or not, it's different story.

I read an article that trading companies in the same building install the same length of wires from the mainframe to the companies' server so that data is transmitted in abt the same time from the mainframe to companies' server.

One of the advantage of using HFT is traders cannot be charged with unfair trading practice such as insider trading, etc. If a trader does the same as HFT i.e. Losing...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #40
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  • Mar 12, 2014 2:35am Mar 12, 2014 2:35am
Very knowledgeable but toothless banter. Why don't the US-citizens among us write to their Senators, SEC Board, FED etc and get HFT stopped !

Do you think crying on FF pages will do something to redress this ?

Amen !
  • #41
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  • Mar 12, 2014 7:43am Mar 12, 2014 7:43am
Who wants HFT to stop? Not me that's for sure.

Quoting vilas
Very knowledgeable but toothless banter. Why don't the US-citizens among us write to their Senators, SEC Board, FED etc and get HFT stopped !

Do you think crying on FF pages will do something to redress this ?

Amen !
  • #42
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  • Mar 12, 2014 10:40am Mar 12, 2014 10:40am
Quoting Spec_And
Not news, intraday scalps are mostly suicide now because HFTs dominate that space, its still possible for retail to make money, but they need to operate on a different time frame, away from the the shorter time frames.
Rubbish
  • #43
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  • Mar 12, 2014 11:59am Mar 12, 2014 11:59am
Ya think? There's a lot of merit in that post IMO.


Quoting cat
Rubbish
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #44
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  • Mar 12, 2014 2:16pm Mar 12, 2014 2:16pm
Quoting Spec_And
Not news, intraday scalps are mostly suicide now because HFTs dominate that space, its still possible for retail to make money, but they need to operate on a different time frame, away from the the shorter time frames.
you're right mate
Decision to buy or sell is better to be taken, at least, on daily TF.
For entering into transactions choose a smaller TF.
I experienced this in recent years and still can have a happy face.
  • #45
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  • Mar 13, 2014 2:15am Mar 13, 2014 2:15am
Quoting Spreadbetter
Ya think? There's a lot of merit in that post IMO.
He said "its still possible for retail to make money, but they need to operate on a different time frame, away from the the shorter time frames", as if he knows how every retail trader trades. Well I trade on shorter time frames entering on a 15second TF and I feed my family from it, so yes, it's rubbish.
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  • Posted: Mar 10, 2014 6:29pm
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    Comments: 45  /  Views: 14,220