Steve Kroft gets a rare look inside the secretive world "high-frequency trading," a controversial technique the SEC is scrutinizing in which computers can make thousands of stock trades in less than a second
Every person who wants to get into day trading needs to watch this video. Your not day trading against other individual retail traders with a handful of money, you’re trading against literal computers that have tens of millions of dollars in their pockets making thousands of trades per second with knife edge precision, that can drive the price of a security up or down with a single trade or series of trades.
He was screaming about how traders can make lots and lots of money with minimal risk specifically because they have access to technology and physical blackbox locations that others don't have... all before any other investor has access to that information, albeit public information. He seems to be fine with people making their trades via a computer, like through an online broker. The aforementioned phenomenon is what he seems to think is unfair.
You probably dont give a shit but if you are stoned like me during the covid times then you can watch all the new movies on InstaFlixxer. Been binge watching with my gf for the last weeks =)
You need to use less then 1 minute data to see it.When the volume bars below the candles or bar charts get longer(more volume) on the opposite move from a strong support or resistance,indicates frequency guys and boxes.When the volume is smaller then the prior one as it makes the turn to the new direction form a strong support price or resistance,indicates no frequencies.But the secret is to enter BEFORE the frequencies start and that's only when the volume bar is SMALLER on the reverse move.
I see. That makes a lot of sense. Do you have a program that analyzes the many thousands of stocks to find the setup that you have described, or do you wait for the price to reach major support and resistance levels on the stocks that you typically trade?
There is a difference. A computer, by itself, is nothing without a user. A "robot computer" would be a computerized system programmed to perform automated tasks in a certain way. Don´t blame other people for being ignorant.
@@totenkopf30 I very much doubt that that was how he saw it. But still, even a regular computer can be a "robot" computer very quickly by running a program.
Awesome and fascinating! I'd like to program my own HFT algorithm, I'd have my computer at the exchange e.g. count twenty or forty ticks in a row of "down", it would then invest for the next tick, or for three seconds, which may likely be "up," it would then get out of the trade, and would wait for the next same opportunity. I wonder how that would back test all day? I can't wait until there are HFT mutual funds, or HFT ETFs. Why can't "retail investors" have it, if the brokerages & banks can? I wonder what the so called experts have programmed their computers to do? I wonder what their results are?
@mason72518 They apparently do. They receive the same data FASTER which for all intents and purposes means they can react on it before anyone else. That's insider trading.
Watching this In 2019, the markets are 100% being manipulated. I look at financial market charts every day, and there are countless examples of manipulation, also known as stop hunts, and I think every intermediate+ trader knows whats going on. I've educated myself on this subject from a few of them traders.
I am a derivatives(futures/options) trader and from experience can say that derivatives have more of an impact on the market than simple HFT on individual company stocks in the cash mkts. Also Hedge Fund trading derivatives have an immense impact as well; just ask the legal counsel for Lehman Brothers.
Depends. The high volume stuff is very laden with day traders and algos. You can even see when they change algos. I actually think some of them have their algos macro'd so they just press a button to change the way their software trades.
Market Knowledge + Algorithm + Programming + Low latency = Speed Traders.. @ 8:16 The Stock exchange network is secured by "Check Point Software Technologies Ltd", which was founded in Israel.
I'm the same way. I like volatile, "crazy gains" stocks. Catalysts and momentum = good, low volume or "stability" = bad, imo. I've never been at my computer for 20 hours, though. Do you do Forex? Stock market's usually an 7.5 hour shift for me.
Good info... if you're curious.. @12:34 Senator Kaufman talks about the "river of wealth". In another "same" video by CBS..thos comments have been deleted.. FYI
I’m beginning on binary options and your advises seem good. I am very glad to get this kind of information. Very informative and helpful. Very good initiative and thanks for sharing...
Well, more for the learning purposes. I want to see what people are doing. There's a lot of canceling, shorting, buying, pumping, dumping, etc... It'd be nice to get a strong visual sense of what that looks like. My L2 "kit" helps with timing, but a better chart would let me know what other people have done in the past.
These guys are contradicting themselves. On the one hand they say they do not trust the computers as these might do something unexpected. Meaning, that they are OK to rely on human traders who cannot do anything unexpected? Bad Logic
^ exactly. Humans don't start rapidly selling automatically when prices drop but computers don't have the ability to do that kind of "reality-check" and can start overselling. Also, the volume of shares controlled by HFT machines are much, MUCH larger than the volume of shares an individual can be responsible for.
@MrKlacoste You have asserted the HFT increases systemic risk. How does it do this? BTW the fact that volume is increased and that liquidity is improved lessens the risk of short term volatility as there are ample parties to trade. Speeding up fill time is a part of having increased liquidity. Prices crash in the market whens traders cant get filled - getting them filled faster reduces the need to reduce the bid/ask level.
I watched this video because I got really concerned with the economy and had not a clue how to handle it. Cash money does not mean a single thing these days. So I chose to conduct some groundwork and ran into Goldiverse. I am so lucky, I can switch my money from cash to various currencies, to any precious metal any time I want. The lawmakers can go and take a jump for all I care. Just Yahoo and bing it Goldiverse.
I suppose. There's usually several major movers during a trading day, every day. I don't want to step outside of the stock market, just yet, considering how much pain I went through just to learn it. One specialty at a time, I figure.
Great job by Steve Kroft, 60 Minutes - interviews revealing the high frequency trading strategy by hot shot high frequency traders, the mili-second big boys (institutional traders). "Without short term traders, there is no liquidity." - interesting... John McLaughlin, StockCoach
Exactly my point. as a shareholder you just need to be concerned about whether or not the C.E.O is adding value to your investment. What has the ability of a man to run a company got to do with his personal life?
Guess it depends on the stock. Most of my stock choices are lightly weighted against the DJIA and heavily against news and signals/channels. Don't like them above $5. Gets too slow up there. Tbh, the computers really do run the show. I just play along side them.
and as for transparency, there are thousands of Traders / Companies / Funds on the market each day whose systems and practices are secret, do we expect them to report what they're doing as well?
I think it's close to over. In fact, I wouldn't be surprised to see it come back down to 13.8k on Monday. Will probably stay around that for about a week and then come back down on some more bad news (made up or real). Anyway, it's all about entry points. I couldn't care less about the DJIA, so long as it's not pulling a 2009 on us.
Heh, I learned it the hard way. Getting pretty good at it, though. Recovering my "tuition" back, one trade at a time. It helps that I'm competitive and dead serious about this being the only career I have a shot in. I don't like my ideas being shot down constantly, thus, I don't like "being an employee". I'm happily unemployable, haha. Until death do I part with the stock market.
Look up flash crash on google. Or better yet watch level2 on certain stocks and see massive orders being placed and pulled within 1000ths of a second in order to "paint the tape"
Oh and if you were to place the shorts, you'd probably spread them out over a range of stocks over an extended period of time, say a week, and then crash all those stocks in one go. That way it doesn't look like you have a giant order right before the "accident". Kind of freaky now that I actually think about what that does to the bag holders.
@johnnystorm28 Not only do we have an idea, we are all feeling its effects. All these technical advances are doing wonders for ordinary working people.
Or they're just not competitive enough. I've seen some very ruthless action recently. Figure, CLSN, a stock that's already taken a massive beating... I saw some terrifically brutal plays during the session. It's really not for the feint of heart.
@johnnystorm28 Not one of those things are necessities. And your point makes clear to me that while people think in those terms its why as a species we shall fail in the end. Nothing of real lasting worth can come of such a myopic view of life.
when I trade I don't back test my positions I look at the chart for my entry or exit position not in my case I don't have a super computer and still crack the mkts
Nah, just stocks. Still don't really understand options, nor do I understand Forex. My system is designed specifically for rapid gain/decline stocks, but I do want to integrate options at some point (once I understand it better).
There needs to be a minimum of delay time to have everyone level and then bandwidth distance and equipment comes into play after that fail safe maybe pointless who knows
Just watched, didn't play. Had other stocks in mind, heh. Just that watching the L2 on that was really eye-opening. They really don't care if someone lost 4/5ths of their account, they want that last 1/5th!
It's electronic front running. If a human did it, it would be illegal already. All trades must stand, no takebacks because your computer messed up, if you mess up you need to go bust. All trades need to be final, no cancelling trades, to do stop hunting and forcing auctions (wash trades aso illegal).
...I do like the ice-tea actually - I do not see any problem with the ads......people sometimes stress on stupid things instead of leaving in peace with themselves..
They did not mention that high frequency trading algorithms can also -manipulate- the market (predatory algorithms are one example). The argument for liquidity doesn't make complete sense : you only need millisecond liquidity for the high frequency traders! The exchanges already have circuit breakers (suspend trading if stock loses 10% in 15 minutes), why not another rule that limits the advantage and potential for manipulation by HFT: impose a 20 millisecond delay on all transactions!
@graham640 Actually, thanks to both of them, you had the chance to buy the computer and get the internet service you used to comment on this video against them. Ironic.
It's gotten so crazy that I've actually been thinking I may need charting abilities for 5, 10 and 30 second intervals. "High resolution" charting as I'd call it. Just so I can see the details. You know what they say about the devil being in the details. Might be a little intense on the ethernet port, but who cares, lol.
Well, good luck. Not sure I'd play around with that much leverage, but I guess it depends on what you're doing. 200x leverage on the stuff I play would send your account to 0 in half a day if you didn't time it right. I guess your swings are much smaller than mine. Almost sounds like Forex, tbh.
It's bullshit that high frequency kills it for others because I make money by piggybacking THEIR MOVES!! And I'm out in less then 1 minute.I simply wait for the frequencies to get the ball rolling and I grab a few ticks of the move that they originally started and I get out before it turns.It's easy,if you know what you're doing.
HFTs do not access information that is unavailable to others. They receive the same information, but have setup better programs for interpreting the data. Just because someone is better for you does not mean they are cheating.
Robot computers selling huge volume of stocks outside of any focus on valuation of the companies they are buying is concerning for the independent investor/fundamental investor. Where is this all going? None of the biggest players told 60 minutes to get lost/you can not see what we are doing.
Don’t know you IAN but if you live in the western world, I will suggest you rewatch this video and do you best to make sense of it. It will be unforgiving if you get to 30 without knowing what investment is or having a clue on how the stock market functions. Unfortunately capitalism is not taught in schools so many of those that go on to be successful usually inherit the knowledge from their upbringing within success and some manage to learn while growing up and become part of the team. Please make time to understand how your savings can grow as you aged.
HFT's execute trades at millisecond and microsecond resolution all day every day, while gov't regulatory bodies take years to decide what the procedure is to go to the bathroom during the investigatory commission they're about to strike. We're toast.
Watching HFT send up Google 80 points in 1 minute is a site you will never forget! Watching Wall Street trading programs take AAPL down 10$ in minutes only to rip it up $30 the next two hours is a site you will never forget. Except and adjust or get out of the way ;)
