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.