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#41 SemiBizz

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Posted 23 October 2010 - 07:20 PM

I have been watching this for some time...

The one thing that confuses and befuddles the HFT Model

Is UNEXPECTED HIGH VOLUME.

As long as volume stays low, the robots continue the vacuuming procedure.

When Volume came in during the FLASH CRASH, you saw the HFT rendered helpless.

Question...what is the difference between program trading and high frequency trading as it relates to price action and its reaction to movement?

Fib


TIME FRAME

How so...in what regard??

Fib


That's all I have to say here, not going to get into a long discussion with you.

You asked, that's my answer. You can ponder it.

Night.

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Volume is the only vote that matters... the ultimate sentiment poll.

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#42 fib_1618

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Posted 23 October 2010 - 09:06 PM

That's all I have to say here, not going to get into a long discussion with you.

You asked, that's my answer. You can ponder it.

I again gave you a perfect opportunity to expand upon a debatable topic, to possibly expand your subscription base, and you have once again dropped the ball Tom...that was my only purpose in my query.

That's fine...better to say that you don't have an answer...and we'll leave it at that.

In answering my own question...there is no discerning difference between program trading and high frequency trading...it's one in the same, just with a different name, and with faster technology. It's all been done before, and once again it's being used as an excuse to justify what can't be explained.

And you can ponder that one.

A pleasant good night to you as well.

Fib

Better to ignore me than abhor me.

Wise men don't need advice. Fools won't take it. - Benjamin Franklin

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#43 SemiBizz

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Posted 23 October 2010 - 09:24 PM

Fib, I didn't ask for any help. And I don't need any. Please stop it. Good Night.

Price and Volume Forensics Specialist

Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"

Volume is the only vote that matters... the ultimate sentiment poll.

http://twitter.com/VolumeDynamics


#44 NAV

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Posted 23 October 2010 - 09:45 PM

If the market closes lower by more than 2% on Monday, I will never, ever make a post on this board again (I can hear the cheers now!).


Fib, this is in no way a challenge thrown at you. It's just a technical debate. I don't think anyone would cheer at you not making a post on this board again, except maybe some permabears. Please stick around irrespective of the outcome.

Question...what is the difference between program trading and high frequency trading as it relates to price action and its reaction to movement?


Can I ?

There's a huge difference. HFT is a specialized and a dangerous subset of program trading. Program trading in a traditional sense refers to pushing bulk orders to the exchange using computers. It was plain vanilla high speed bulk order execution. It did not involve specialized algorithms to probe order books, hunt stops,etc which is what the algorithm trading is all about. It's the hot money playing games with each other as long as there's an orderly market and providing "Superficial liquidity" to markets. That liquidity can abandon the market in a heartbeat.

Here's an example. Assume that the market is trading at an important support. The entire universe knows that the support will not be taken out without a fight. Now comes a mini intraday bounce from the support towards the next resistance. It's a perfect opportunity for the algorithms to probe the stops above the resistance and the HFT boyz would push hundreds of billions of dollars to probe the order book. In a normal market, the HFTs would hunt the stops and mission accomplished and they are on prowl for the next opportunity. But what do you think would happen, if in the middle of their probing, huge volume enters the market in the form of instituitional selling ? Not only will the bids dissapear once the support breaks, but the HFT money (huge temporary liquidity) will desperately try to get out at the same time, which can exacerbate the decline. Well, i am not in anyway saying that this is what happened during the May crash. But it's a very plausible scenario in today's high leverage market mixed with dumb robotic trading. I say "dumb", cuz these algorithms are trend neutral and they operate both with and against the trend.

Edited by NAV, 23 October 2010 - 09:52 PM.

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#45 fib_1618

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Posted 23 October 2010 - 10:08 PM

Fib, I didn't ask for any help.

And I don't need any.

Please stop it.

Good Night.

You presented your opinion in the thread. No one forced you to do this. You stated that you've "been watching (the HFT model) this for some time" in providing your insight on the subject matter. By doing this you opened the door for others who may have wanted to follow up on your post. I then gave you a legitimate follow up question which I thought would expand the discussion, no less, to allow others to add to the thread. Since you run a subscription service, your answer might have driven more traffic to your sight to learn more of your methodology and your experience. We're all here to help each other whether it's asked for or not. But it doesn't do any one any good to make "drive by" statements and not give anyone the chance to discuss the matter for the betterment of all concerned. Better not to post at all...that way you won't have to possibly defend yourself.

Fib

PS - Thank you NAV...your input was enriching and appreciated.

Better to ignore me than abhor me.

Wise men don't need advice. Fools won't take it. - Benjamin Franklin

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#46 SemiBizz

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Posted 23 October 2010 - 10:27 PM

Having an academic discussion about HFT and program trading will not make a dime for anyone. Putting out a deadly accurate forecast every day is what I do. To enable people to make better trading decisions. That means putting my neck on the chopping block each and every day. Generating price targets, support and resistance points and publishing it, day after day. There is a big difference between a technical analyst and a FORECASTER. I am the latter. I rate a lot of issues each and every day... that includes Nasdaq, SPX, ES, RUT Futures, SOXX, $DJT, $XOI, $BKX, Gold, GLD, Crude, USO and the pertinent currencies. And my work speaks for itself, I don't need soft balls thrown at me on a chat board to prove my manhood. I''ll leave the academics to someone else, as you can see I have a full load of things to do.

Price and Volume Forensics Specialist

Richard Wyckoff - "Whenever you find hope or fear warping judgment, close out your position"

Volume is the only vote that matters... the ultimate sentiment poll.

http://twitter.com/VolumeDynamics