A good point, and exactly how it’s so easy to beat the market. Over and over again the big guys run into the problem that they can’t actually execute their ideal moves at best price, since doing so would move the market in whatever direction they are thinking the market will move (the market is the market, and can’t beat itself). A little guy with a $1M account has no such handicap.
Look, the only folks being manipulated in the manner that the ZH article is suggesting is guys going in with market orders!!! Not day traders, not retail investors. Going in with a limit order, these guys cannot manipulate you. I have, as a retail trader, actually been able to profitably round trip trade in exented hours when the liquidity is there for it (earnings release and the like). The reason I was not thrown around like a rag doll by HFT is becasue I had limit orders and my orders were needed to meet the other side of the market. I would not do it again in fear that liquidity would dry up by the time I want to exit but for demostration purposes I wanted to say it is not as “rigged” as you are letting on. Just becasue HFT is winning does not mean I’m the one losing. Apparently it is the big guys with market orders that lose the most!
HFT did not kill day trading. Yes, you can see it’s mark on market structure intraday, but it does not destroy market structure. As I practice trade everyday based on market structure context and price action, I find myself slowy adapting to set ups that fail due to quick pops/ reversals. (HFT in action). Like I said, it just becomes part of what you look for as a trader. You adapt.
You two are incredulous. It’s obvious there is a weak understanding of market mechanics here, to say the least. Here’s a quote from a guy that learned the hard way. But I’m sure you both are experts on the effects of sub-penny pricing. I’m reminded of the freshly minted private pilot that thinks they are ready to fly into Telluride or Key West. I good example would be John Jr. Didn’t turn out too well for him or the women in his life.
"SEC Rules
SEC rules specifically PREVENT investors and institutional investors from engaging in price improvement and sub-penny pricing. This gives broker-dealers, market makers, and other “intermediaries” a massive edge over everybody else. They can play the scalping game and front run everybody else. At Title, the tightest effective bid/ask spread I could offer was $3.0003/$3.0097. Other market participants could offer a tighter spread and front run me.
This is why my C limit orders would rarely fill. If my order filled, the bid/ask would almost always move against me."
Good luck to you all and I’ll leave with something one of you will recognize. And remember, almost all gamblers win in the beginning. Figure that one out.
Activity Statement January 4, 2016 - July 22, 2016 Interactive Brokers LLC, Two Pickwick Plaza, Greenwich, CT 06830 Help | Expand All | Contract All | Print Time Weighted Rate of Return 43.27%
Meaniless, and could be fabricated, but I thought it might offer entertainment.
Look, I work with high liquidity futures contracts. Although I paper trade now so I can figure out what the hell I’m doing before I blow out my account, I did get some experience trading futures live for a while. I had NO problems getting filled at the exact tick I wanted whenever I wanted. The same with stops. I’ve experience some bid/ ask chasing when it comes to options, but I would also not try to make a living intraday trading them.
I see this argument going nowhere. Before I gracefully back out of it, I want to say, I hate when intraday traders and degraded to “gamblers”. Yes, it is a process that the goal is to put chance and probability on your side. However, the conotation of gambling misses the mark. I like to say everything in life is on the spectrum of gambling, You have roulette on one extreme and everyday choices like whether to leave the house on the other end. Long term investing is on there. Black jack is a step above roulette. Intraday trading is more like gambling than long term investing BUT way above black jack. I say this because intraday trading is more skill intensive. For example, if you are playing black jack, you have to play your hand …even if it sucks. You can’t just walk away from the game. In trading you can look at your hand first, and only play the ones you like. You can play none if you want. That is what a skilled trader can do. They can wait for set ups that make sense and only trade those. They can wait and only play the hands that years of practice can tell them are the ones that have an 80% chance of working.
ok, I’m done… Back to my practice.
Unlike Blackjack, you are not dealing with a set of repeating numbers with known odds. LTCM learned that the hard way. But Blackjack is easily beat. And you dont have to play when the odds are against you. I beat the game to the tune of 100s of thousands of dollars. Eventually it wasn’t worth my time. And it became harder and harder to avoid the heat. Say hello to John Jr. for us.
Irrelevant. You don’t have to be an expert on their competitive advantage, to succeed at your own competitive advantage, you just have to not go head-to-head on theirs.
Why are you always so combative, trying to show off you “knowledge” while saying other people know nothing? It’s just a simple thread discussing the reasons for after-hours spikes.
Exactly!
A year ago we had the “OMG China” meltdown. Lots of traders who had no clue about that market, going up against me on my competitive advantage…they all lost. They should have stayed out of markets they didn’t understand, just like i stay out of high-frequency trading and computer quanty-stuff.
Title! nice!