Don’t Fear the Machines (algo’s, HFT) – Embrace Them

Don’t Fear the Machines (algo’s, HFT) – Embrace Them

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I recently received an email from an individual that read my book to tell me how much he loved what I had to speak about and how he really wants to learn to day trade. As it turns out, he works for an Institutional Trading Technology firm and has developed algorithms to assist these firms in automating their trading and to provide the best fills possible.

He wrote a blog that he posted on his website that he wanted me to share with my community. Here is an excerpt from the blog:

“Having been on both the institutional and retail sides of trading, I know there is animosity, confusion, and anxiety amongst individual investors around what institutions do with algorithmic and high frequency trading (HFT) behind the scenes. Trading algorithms can be complex, and unless one has a solid grasp on both quantitative trading and how the technology behind them works, the intricacies can seem mysterious. Since it’s human nature to fear the unknown, it’s easy to see how not understanding the ways institutions develop and leverage trading algos can seem scary and murky.”

The information M.R. provided in his blog is incredibly insightful and really helps to give us a “front-line view” of what the algos and HFT’s are doing out in the market. He also helps to provide some insight on how we can use the understanding of the mechanics of algos and HFT’s to better our day trading skills.

To view the blog in its entirety, please visit his blog here.