algorythmic trading (algos) - messing up the markets!

[jfutures]

Over the past few monthe it seems as though computers have taken over.
They are recieving information for large orders etc from eurex and trading off of it milliseconds before we even see it.
They also go counter trend. So they see where people are getting long/short in smaller sized lots, knowing that the people with smaller clip sizes will have tighter stops, then going against them to push them out of the trade to take it a few more points. So your trade can be 100% right but the computers will push the market 20tix opposite to you.
This to me seems very unfair as the computers are taking the human sense out of the market. The computers are recieving data then using it to trade before we even get to see it. How do Eurex expect us to compete with that?!? Its a dis disgrace!

 

[arabianights]

understand how they work and trade with them imo... no one has a right to make money in the market

but yeah I think a lot of people would pay good money for RSJ's head's head on a plate

 

[GammaJammer]

But these computers create discernable patterns which can in turn be exploited by the nimble.

It's just that the rules are changing somewhat and people need to keep up.

No biggie imho - someone just moved your cheese a little to the left.

 

[jfutures]

thats the whole point GJ they dont move in any patterns what so ever, so you cannot take advantage of them

 

[arabianights]

they do...

in fact you described one example there, they try to squeeze out the locals when nothing is happening

so when nothing is happening sit a long way back and get in during the squeeze, then wait for it to come back

 

[jfutures]

they do...

in fact you described one example there, they try to squeeze out the locals when nothing is happening

so when nothing is happening sit a long way back and get in during the squeeze, then wait for it to come back

So you would do that? There are a number of reasons why it wouldnt work:
-You wouldnt trade enough
-It may genuinly be a wrong trade
-You dont know that it will even come back as there is no reason it should now if levels of s/r are now broken etc
-There is no logic behind the trade, if someone asked you: "why did you do that?" and you replied: "im not trading off of technical analysis, im waiting for computers to move the market and going aginst them, they would laugh, and have a right to slap you".

 

[arabianights]

So you would do that? There are a number of reasons why it wouldnt work:
-You wouldnt trade enough
-It may genuinly be a wrong trade
-You dont know that it will even come back as there is no reason it should now if levels of s/r are now broken etc
-There is no logic behind the trade, if someone asked you: "why did you do that?" and you replied: "im not trading off of technical analysis, im waiting for computers to move the market and going aginst them, they would laugh, and have a right to slap you".

I'll fade panic (dependent on why it's happening) sure. And yeah it could be wrong, but that doesn't matter, in the long run it'll work even if you do get burnt badly occasionally.

I don't really understand the rest of your comments. You can do that while continuing to trade normally at the same time... it's just another string to your bow, as it were, you don't have to trade off technical analysis or trade "enough", at least not anywhere respectable, and if anyone slaps me I'll slap them back, harder.

 

[shadowninja]

the people with smaller clip sizes will have tighter stops,

Adapt or die?

The markets are the fairest thing out there. Survival of the fittest. The best win. There are no social security/benefits. The markets don't give a **** whether you were born in a stately home or in a council flat. They don't care whether you have a PhD, a string of professional qualifications in surveying/law/accountancy and a previously successful £10m business or you brushed public toilets for the first 5 years of your working life with a fag hanging out of the side of your mouth. It doesn't care whether you're black, white, yellow or brown... gay, straight or bi. It doesn't care if you have both arms or type with a device attached to your head. It doesn't care whether you're 18 or 80. You can trade with a laptop or even just a public phone and a copy of the FT (depending on your instrument of choice). I can't think of anything fairer.

 

[robster970]

Over the past few monthe it seems as though computers have taken over.

I know. Shocking isn't it.

 

[jfutures]

Adapt or die?

The markets are the fairest thing out there. Survival of the fittest. The best win. There are no social security/benefits. The markets don't give a **** whether you were born in a stately home or in a council flat. They don't care whether you have a PhD, a string of professional qualifications in surveying/law/accountancy and a previously successful £10m business or you brushed public toilets for the first 5 years of your working life with a fag hanging out of the side of your mouth. It doesn't care whether you're black, white, yellow or brown... gay, straight or bi. It doesn't care if you have both arms or type with a device attached to your head. It doesn't care whether you're 18 or 80. You can trade with a laptop or even just a public phone and a copy of the FT (depending on your instrument of choice). I can't think of anything fairer.

your comment doesnt make sense. are you sure you posted it on the right thread?

The point is that Eurex are selling data to the computers and as a consequence they are able to tell wether the market is going up or down milliseconds before anyone knows anything has happened.

E.g. A hedge fund go to market with 5,000 bund. The very instant that the person clicks the blue, the computer knows that someone is going to market with 5,000 lots before the person has even been filled, the computer then buys infrount of it, the 5,000 lot then goes to market and the price is pushed up. How can a human compete with that? - then cant

 

[arabianights]

your comment doesnt make sense. are you sure you posted it on the right thread?

The point is that Eurex are selling data to the computers and as a consequence they are able to tell wether the market is going up or down milliseconds before anyone knows anything has happened.

E.g. A hedge fund go to market with 5,000 bund. The very instant that the person clicks the blue, the computer knows that someone is going to market with 5,000 lots before the person has even been filled, the computer then buys infrount of it, the 5,000 lot then goes to market and the price is pushed up. How can a human compete with that? - then cant

Have you got any proof of that?

 

[shadowninja]

your comment doesnt make sense. are you sure you posted it on the right thread?

The point is that Eurex are selling data to the computers and as a consequence they are able to tell wether the market is going up or down milliseconds before anyone knows anything has happened.

E.g. A hedge fund go to market with 5,000 bund. The very instant that the person clicks the blue, the computer knows that someone is going to market with 5,000 lots before the person has even been filled, the computer then buys infrount of it, the 5,000 lot then goes to market and the price is pushed up. How can a human compete with that? - then cant

Oh, perhaps I misunderstood your first post. :whistling

 

[jfutures]

yes i did read an article but i cant find it now. i will post it soon.

 

[jfutures]

page 9

 

[jfutures]

http://www.eurexchange.com/download/documents/publications/e_xpand_200910.pdf

 

[jfutures]

i will not allow me to post the link
if anyone want it then tell me your address

 

[jfutures]

sorry......it did

 

[TAjammy]

once the algos get worse it will become pretty obvious to spot the patterns. i made a huge thread on this and i came to the conclusion that algos trade the patterns that are already there in the first place.They'd probably ruin the patterns yeh, but bring some aswell

 

[jfutures]

So what are we meant to do? Not trade using technical analysis? Only trade fundamentally and have positions for a long long time. Because they can ruin the technicals but not fundamentals.

 

[arabianights]

so where's it say they're getting the orders before they're filled? pre-trade data means pre-open data...