Want to understand more about HFT, watch this video, it's excellent.
The meat starts around 22mins. Much of it is related to stocks/futures but nevertheless it's worth watching in relation to cash FX as the robots are certainly operating in that sector.
Biggest takeaways -
1. Most HFT is about market making, buying bids and selling offers.
2. Traders since the beginning of time have ALWAYS paid more money to be located the nearest to the action (co-location is no different from buying an expensive membership to an Exchange and that has always meant potential benefits)
3. Trading direction (momentum instigators) via HFT is both capital intensive and carries a lot of potential Regulatory heat. It's also the strategy that gets most of the press but it's done the least. Easier money made working the bid-offer spreads.
4. HFT is really just a modern take of what's ALWAYS been going on with market making and short term trading/movement. Whereas in the past it was done via word or phone, now it's done by computers.
https://www.youtube.com/embed/Dqvqbvzk9yA
The meat starts around 22mins. Much of it is related to stocks/futures but nevertheless it's worth watching in relation to cash FX as the robots are certainly operating in that sector.
Biggest takeaways -
1. Most HFT is about market making, buying bids and selling offers.
2. Traders since the beginning of time have ALWAYS paid more money to be located the nearest to the action (co-location is no different from buying an expensive membership to an Exchange and that has always meant potential benefits)
3. Trading direction (momentum instigators) via HFT is both capital intensive and carries a lot of potential Regulatory heat. It's also the strategy that gets most of the press but it's done the least. Easier money made working the bid-offer spreads.
4. HFT is really just a modern take of what's ALWAYS been going on with market making and short term trading/movement. Whereas in the past it was done via word or phone, now it's done by computers.
https://www.youtube.com/embed/Dqvqbvzk9yA
Road To Wisdom? To err and err and err again, but less and less and less...