Tag Archives: misconceptions

5 misconceptions of HFT

5 misconception of HFT

Facts I never knew

Thanks Super Fan Nuno for sending

Who You Callin’ HFT? 5 Misconceptions Surrounding ‘High-Frequency Trading’

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Statistical misconceptions

Statistical misconceptions

All according to NYC Contact who found this site. Thanks to him as usual

http://www.statisticalmisconceptions.com/MiscAndInvite04a.html

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10 misconceptions about machine learning and neural networks

10 misconceptions about machine learning and neural networks

Consider me still not convinced but I am coming around

Thanks to the NYC Contact for sending

http://www.stuartreid.co.za/misconceptions-about-neural-networks/

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I list and clear up the truth on misconceptions on the world of high frequency trading aka HFT

I list and clear up the truth on misconceptions on the world of high frequency trading aka HFT

I feel like Edward Snowden right now as I got info that confirms my theory on high frequency trading.

 

Let’s clear up on some misconceptions:

1. This broker only supports Linux with C++ and Java API documentation. They seem to have taken the complex route if you want to work with this broker who is only dedicated to HFT trading shops with the ultra lowest latency requirements. This is probably why you see so many jobs with C++ and Java in Linux. This development stack is not meant for slackers or newbies, don’t use as you will get BADLY burnt to lose your entire account in short order. It is a recipe for disaster!

2. For the colo, there seem to be various data center options you never heard of. The one you know is the tiny one. I could only imagine the hosting costs.

3. The broker provides all the third party connections into other exchanges. BTW, they own the pipes to that so no third party libraries on theirs. Sorry but those are most likely the rules. The connections may be pro bono no different than you find on something like Interactive Brokers.

4. The requirements for funding is massive. As you are negotiating, your terms for usage with this broker can vary. From my understanding, you are expected to be trading in the daily volumes of 250,000 to a 1,000,000 orders PER DAY. That is not a typo (That seems to be the truest definition of what high frequency trading is) That translates to $4000 per day in commission fees win or lose. They may not even talk to you  if you have less than a $1M in capital. I would suggest more like $5M or even $10M. Boy, I got a long road ahead.

What to do?

1. Stick with something like I got going on. Stick with easy to understand programming languages like C#/.NET or Matlab. I would not even think about using some wonky open source project written by some dude at a university or in a garage. Yes. I am talk to you lover of R or Python. Unless you wrote 100% of all your code with no dependencies, you are asking for a boat load of trouble if you have a little unknown things called a memory leak. Watch those trading positions go off the rails if something goes wrong. Oops. Sorry. Don’t make it complicated yet for HFT but that could come down the line once your strategy/models are in robust profitable state.

2.  Get your trading environment running for a long time to show constant profit and software stability.

3. Ensure you have a HUGE capital account with a certain amount you are willing to risk.

All in all, this is how you separate all those wimpy talkative unprofitable little boys from the true profitable men. Seriously, those little boys know crap so don’t listen to them. As said, this is how you do it. Period. No questions asked. Are you the gambling type? Because that is what you are going to do and need to stay profitable in this crazy jungle called high frequency trading.

Now of course, this could change with upcoming regulation that we don’t know about.

Remember I try to have your back

Bryan

 

UPDATE: You may be able to get Lime to return calls with a minimum capital account of $250k.

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HOW DO YOU START A PROFITABLE TRADING BUSINESS? Read more NOW >>>

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!