high frequency trading- Stock Market is Rigged

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  1. #1
    MasterWhite's Avatar
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    Default high frequency trading- Stock Market is Rigged

    Definition of 'High-Frequency Trading - HFT'

    A program trading platform that uses powerful computers to transact a large number of orders at very fast speeds. High-frequency trading uses complex algorithms to analyze multiple markets and execute orders based on market conditions. Typically, the traders with the fastest execution speeds will be more profitable than traders with slower execution speeds. As of 2009, it is estimated more than 50% of exchange volume comes from high-frequency trading orders.

    Michael Lewis just published a book "Stock Market is Rigged"

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    Interesting
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    Envious Eric is offline Senior Member
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    all over the news lately...even mark cuban is against it, along with a lot of other people.

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    Quote Originally Posted by Envious Eric View Post
    all over the news lately...even mark cuban is against it, along with a lot of other people.
    Got this in his email recently
    High Frequency Trading, and Proof that the SEC Approach to Insider Trading is Completely Wrong | blog maverick

    and

    http://blogmaverick.com/2014/04/03/t...uency-trading/

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    Yes it's rigged, but it's irrelevant to the average trader/ investor anyway. Most people don't have 250,000+ a day to spend on the infrastructure needed to be a HFT trader.

    HFT only really matters to day traders, desperately trying to read the tape and a lvl 2 screen. Using limit orders will guarantee the price you want.
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    Quote Originally Posted by Stance View Post
    Yes it's rigged, but it's irrelevant to the average trader/ investor anyway. Most people don't have 250,000+ a day to spend on the infrastructure needed to be a HFT trader.

    HFT only really matters to day traders, desperately trying to read the tape and a lvl 2 screen. Using limit orders will guarantee the price you want.
    I wouldn't say that is true. We have artificial prices because of HFT so in that sense it effects every trader not to mention I believe it makes the market unnecessarily inefficient. How much it effects people is dependent on how long they will hold a position and how often they are making trades. It is true that traders who don't hold for long are more effected then their counterparts.

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    High-frequency trading is just the tip of the iceberg, really. It all meshes with the entire market, as a whole, being manipulation. Major players buy low, sell high, and fabricate reasons why the market decided to jump either way.

    "The market plummeted 300 points today, due to investor hesitation concerning the financial crisis in Cyprus." Here's your sign.

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    Anyone who thought the stock market wasn't/isn't rigged is an idiot.
    MasterWhite, Redx and Mitch Powell like this.

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    I can't help but to roll my eyes and shake my head every time I hear something about the stock market being rigged. Of course its rigged its meant for the big boys with a tone of money to make more. Reasons why I quit trying to learn the stock market, better off with a 9-5 job.
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    Quote Originally Posted by MBZGuy View Post
    I can't help but to roll my eyes and shake my head every time I hear something about the stock market being rigged. Of course its rigged its meant for the big boys with a tone of money to make more. Reasons why I quit trying to learn the stock market, better off with a 9-5 job.
    I would agree with most of this, but not the last part. 9-5 jobs are for suckers also.

    As far as issues with the stock market, I have a huge problem with the valuation of companies. Nearly any other business you purchase you buy/sell for 2-3x yearly net profit give or take depending on industry. Once the exact same company goes public, its suddenly worth 20-40x earnings such as chipotle resturants. What in the actual F*ck?!? So just to make back the "purchase price" you have to have up to 40 equally high paying years just to break even? Forget that nonsense. The only stocks I deal with are RRSP's and other tax diverting accounts. If I'm looking to invest, I can think of several other options for my money then stocks... / rant
    Last edited by VII; 04-06-2014 at 05:12 PM.
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