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Imustaskforhelp 21 hours ago

We make trade decisions with hardware _without even seeing an entire packet coming in on the network_

Wait what????

Can you please educate me on high frequency trading... , like I don't understand what's the point of it & lets say one person has created a hft bot then why the need of other bot other than the fact of different trading strats and I don't think these are profitable / how they compare in the long run with the boglehead strategy??

hermitdev 20 hours ago | parent [-]

This is a vast, _vast_ over-simplification: The primary "feature" of HFT is providing liquidity to market.

HFT firms are (almost) always willing to buy or sell at or near the current market price. HFT firms basically race each other for trade volume from "retail" traders (and sometimes each other). HFTs make money off the spread - the difference between the bid & offer - typically only a cent. You don't make a lot of money on any individual trade (and some trades are losers), but you make money on doing a lot of volume. If done properly, it doesn't matter which direction the market moves for an HFT, they'll make money either way as long as there's sufficient trading volume to be had.

But honestly, if you want to learn about HFT, best do some actual research on it - I'm not a great source as I'm just the guy that keeps the stuff up and running; I'm not too involved in the business side of things. There's a lot of negative press about HFTs, some positive.