New Flash Boys the book has captured the imagination of everyone who invests or trades in the stock market. The fear that the market is “exchanged” is everywhere. The CEO of IEX, of course, hopes that his new exchange will take advantage of all the news media and horror.
However, most investors and retailers don’t have to worry. If the investments made in the long-term portfolio are with a large or huge mutual fund or pension fund, then those funds are being used by Dark Pools outside of exchange transactions that cannot be seen by HFTs.
If you are a retailer, remember that most of the orders placed by online retailers with online brokers are met from this online broker inventory. So your orders never reach the exchanges. If you are using an Electronic Communications Network ECN, most of these requests are not sent to exchanges.
They are here 5 tips for HFTs to avoid the previous race:
Analyze your stock tables using large volume accumulation / distribution indicators. These are the uptick / downtick indicators that track the largest lot of 50,000 – 500,000 shares, as opposed to the smallest lots that are typically between 100 shares and 5000 shares. Entering with a huge purchase keeps the HFT request out of the flow because the Dark Pool requests are hidden from the HFTs.
Remember that any order with 10,000 shares or more is understood to be a “Large Lot” and is sent to exchanges more often if your online broker’s inventories are very small.
If you are a day trader, you must accept that HFT activity will interfere with your trading. There is no way to get around during the day. HFTs are sold 1000-3000 times per second, you can only trade on YOUR minute scale according to the law and circumstances. Most retailers could not afford a million dollar HFT trading hardware and software setup.
Do not use “Market Orders”. An At Market order tells your broker to fill the order at the market price. This can create an opportunity to slide and make it wider, which will give you a higher cost entry. In addition, At Market Orders sends a message to the online broker and the market in general that you are not an experienced, experienced investor or trader. Market demands are rarely used by experts and professionals. There are only rare specific purposes for these requests.
Don’t use a simple “Limit Order”. Limited demand is the most common reason for retailers, especially day and swing traders, to have constant losses. Professionals stopped using limit orders a few years ago and switched to more complex requests between multi-level controlled parentheses. You need to learn these new types of orders if you plan on swing or day trading so that you can avoid falling into a huge HFT drop or gap.
Huge HFT activity is usually a one-day event based on news, arbitrage from another market or instrument, hedging, orders from retail clusters caused by retailers, all using the same trading system, strategy, MACD or stochastic indicators and some technical sets. UPS. One of the huge advantages you have as a retail trader using technical analysis and stock charts is that they control HFT, Dark Pool, Smaller Fund, Corporate Buybacks and many more prices and so you can see more models telling you how to control them. the price will play out from there.
One last tip is that HFTs rarely change the trend, so don’t start selling short after a horrible HFT day.