My question and answers on strategies for those without servers at the exchanges

(Last Updated On: July 4, 2012)
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My question and answers on strategies for those without servers at the exchanges

Here is a Youtube email message from someone:


Like your channel, looks like you have put a lot of thought into it. 2 questions:
1. I was thinking about joining but is your site focused on people who are trying to get jobs at HFT firms or for retail traders trying to develop their own algos within the limitations of not having servers co-located at the exchanges?
–> I would say the membership focuses on the second. I have many institutional traders who are looking for alternative ways to develop models and strategies.
2. What do you think are the best quantitative strategies for individual investors who do not have servers at the exchanges?
–> You can still do mid or low frequency with the same strategies. Having servers on the market will be regulated at some point. The SEC already noted they are investigating this.
As a retail trader without access to a server on the exchange, the best I can do is to put a server in a New Jersey data center. But even here there’s a 2+ ms delay when routing orders straight to the broker. If a server on the exchange is at <65 microseconds latency, the HFT guys can get 30+ Immediate or Cancel orders off in the time it takes for a retail guy to do one. It seems that this time disadvantage would eliminate many of the most profitable, sure-fire HFT strategies. So what strategies are left?

–> It is a distinct disadvantage and noted by the SEC. I am sure something will be addressed on this in the future. ALso, stay away platforms as they are limited to one data connection and brokers. Your broker could be corrupt if dealing with forex.

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!
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About caustic

Hi i there My name is Bryan Downing. I am part of a company called QuantLabs.Net This is specifically a company with a high profile blog about technology, trading, financial, investment, quant, etc. It posts things on how to do job interviews with large companies like Morgan Stanley, Bloomberg, Citibank, and IBM. It also posts different unique tips and tricks on Java, C++, or C programming. It posts about different techniques in learning about Matlab and building models or strategies. There is a lot here if you are into venturing into the financial world like quant or technical analysis. It also discusses the future generation of trading and programming Specialties: C++, Java, C#, Matlab, quant, models, strategies, technical analysis, linux, windows P.S. I have been known to be the worst typist. Do not be offended by it as I like to bang stuff out and put priorty of what I do over typing. Maybe one day I can get a full time copy editor to help out. Do note I prefer videos as they are much easier to produce so check out my many video at