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Should computer pragrammed trading be banned?
arty
post Posted: Sep 6 2014, 11:56 PM
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All you need is a faster computer that can beat the ones of Goldman Sux & Co.
I've just been sent a description of this little beauty:
http://www.idgconnect.com/blog-abstract/87...rt-greater-plan

No wonder so many passwords are being cracked by sheer brute force - with a beast like that at China's disposal...



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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
flower
post Posted: Jun 27 2014, 11:56 PM
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The chickens are coming home to roost:

http://www.bloomberg.com/news/2014-06-27/m...ays-action.html

For years, brokers and traders have assured anyone who cast aspersions on Americaís electronic stock market that the concerns donít add up. Then came Eric Schneiderman.

New Yorkís attorney general has spent a year digging for dirt on two of the main features of modern market structure, dark pools and high-frequency trading. This week, he hit a vein with a 30-page complaint against Barclays Plc. (BARC)

Schneidermanís suit against the British bank alleged Barclays executives lied to customers while secretly cozying up to high-frequency firms. In doing so, he emboldened those who contend the private venues are havens for bad actors taking advantage of mutual and pension funds. The action provided ammunition to those who say the stock marketís opaque structure mainly serves insiders.

etc etc etc.





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Combining Fundamental comments with Fundamental charts.
 
flower
post Posted: Dec 16 2013, 02:32 PM
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In Reply To: arty's post @ Dec 16 2013, 02:17 PM

QUOTE
How can you tell?
Which small stocks do you think it applies to?


Hi arty, not watching many stocks but certainly am watching those few I hold, CVN and SEH display no absurdly low numbers traded like 1, 3, 18 for example, if correctly observed it's refreshing to say the least, hopeful they all go down to the beach, get p...... out of their mind and blow their addled brains out biggrin.gif

NST an ideal example of the complete opposite thumbdown.gif








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Combining Fundamental comments with Fundamental charts.
 
arty
post Posted: Dec 16 2013, 02:17 PM
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In Reply To: flower's post @ Dec 16 2013, 02:07 PM

no - not really.
How can you tell?
Which small stocks do you think it applies to?

What I do notice though: Volumes are generally down across the board. But that's not surprising, given the time of year.



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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
flower
post Posted: Dec 16 2013, 02:07 PM
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Anybody noticing a marked reduction in bot trading today?

Have the perpetrators shut up shop for a summer break---maybe at least the next 14 days may see some stability return rolleyes.gif





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Combining Fundamental comments with Fundamental charts.
 
mistagear
post Posted: Apr 25 2013, 01:57 PM
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"Yawn"
Topic is redundant.
Market would have to go back to Floor Trading Only and phone orders........ AS IF
Whilst ever DTM Platforms exist, Algo's here to stay



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NightStalker
post Posted: Apr 25 2013, 12:52 PM
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In Reply To: arty's post @ Apr 25 2013, 10:25 AM

Hi again Arty, and Mick smile.gif

Yes, I take your point, but when you talk about momentum, directional change, etc, that used to be seen as the summation of the behaviour of a lot of people, who collectively make up "the market". And it is their behaviour that is governed by sentiment. Iron ore price is up, so sentiment swings in favour of BHP, Rio, etc. That sort of thing. A resistance level is formed by the psychological barrier of a lot of people who perceive that level as a resistance. Once that breaks, and that level is seen as a support, it is because all those people consider that they are now safely above what was a psychological barrier. You get the idea.

Those are the classical teachings of people like Weinstein, Elder, and countless others - they regard the patterns as reflections of what PEOPLE think, feel, do...

My point is that the PEOPLE are now being taken more and more out of the equation by the computerized trading of all types. I think Mick "gets it" when he says that perhaps the bots etc will evolve their own sets of TA patterns that we - maybe - need to interpret differently over time.

And I didn't take your previous post as having a go at me - no apology needed wink.gif I am more than able to have a robust debate with somebody without taking it personally:)

And in the case of "not in my lifetime" - perhaps that's my role - to extend your lifetime? Being a surgeon and all.... wink.gif



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Regards, NightStalker

Algorithmic trading, and HFT are rendering Technical Analysis null and void.
 
arty
post Posted: Apr 25 2013, 10:25 AM
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In Reply To: NightStalker's post @ Apr 25 2013, 08:18 AM

Hi NS;

Yes: "What Mick said."

I didn't intend to have a go at you and apologise if my late-night reply came across as such.

Interesting that you interpret the technical details in the context of sentiment, fear and greed. I'm certainly aware of those emotions; however, when I see a directional change in price, volume, or momentum, I take it in its technical meaning, a rather abstract concept that is based on the algorithm it's derived by. (I have probably an unfair advantage of my own that I'm able to analyse the algorithms, even programmed my own variations. Therefore, I see parallels in the world of Physics rather than Psychology.)

You may recall that I frequently call for emotion-less trading. Could be that my mind works more like a 'bot in that regard, which makes it easier for me to tune into the new paradigm. But I still "get" your and others' sentiment about these matters and admit that it's damn hard to accept what is being forced upon us from vested interests. I'd be among the first to welcome a ban of HFT and dark pools, even a return to "the good old days" when traders pitted their wits against each other and nothing else.

Can't see it happen though. Not in my lifetime.



--------------------
I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
mullokintyre
post Posted: Apr 25 2013, 09:53 AM
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In Reply To: NightStalker's post @ Apr 25 2013, 08:18 AM

Morning Nightstalker Arty et al.
All may not be lost. Over time, even the HFT's, bots, dark pools etc will create their own history.
Even if the really smart bots are evolutionary in that they change and adapt their behavior to the market stimuli, they will still create trading patterns and create cycles. Maybe over time, we will see new indicators to replace the ones in which you have lost faith.
Although there are many people who decry HFT, dark pools trading, bots etc, its going to take a lot to get rid of it, there are just too many vested interests in this sort of trading. In fact the only way it will change is for another organisation to set up in competition to the ASX, and given their power, that looks unlikely to happen.


Mick.



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NightStalker
post Posted: Apr 25 2013, 08:18 AM
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In Reply To: arty's post @ Apr 25 2013, 12:39 AM

Morning Arty smile.gif

I think what Schwartz is referring to - and I would agree - is AUTOMATIC stop losses. Nothing wrong with "manual" stops. The ones you apply yourself and physically have to activate by selling.

The comments re TA are my take on the effect that algos, and HFT (and also dark pools) are having on the markets. TA has traditionally been all about the sentiment and the emotions of the markets, as represented by the charting, whether candlesticks, lines, point & figure charts or whatever. The various patterns that we have learnt over such a long time were interpreted to represent the sentiment of the markets, and used to predict probabilities as to what MAY happen next. All based on the prinicples that history tends to repeat, and also move in cycles.

However, the use of algorithmic trading, HFT, and now dark pools, has corrupted all of that IMHO. The majority of trades involve NO emotion or sentiment at all - purely reactions of computers to other computers. Logic. No emotion. That is their supposed strength. You could interpret the downspike on the Dow a couple of nights ago as "fear" - but it wasn't really - it was purely a logic response from algorithms that reacted to the keywords in a fake tweet.

Shorting (one of my pet hates as I'm sure you know) has traditionally been tolerated by those who don't short, on the basis of the expectation that at some stage the shorters will have to buy back in and cover, leading to short-covering rallies. But now, a big majority of the short covering occurs via dark pools, off market. So short covering rallies are getting more and more scarce - which could be one of the reasons we are seeing such depressed prices on so many stocks that are not "safe haven" stocks. They are being shorted to the basement, but then covered on the dark pools so the prices are not bouncing.

So my contention is that all those lovely chart patterns, on which I based my trading for so many years, are getting more and more irrelevant. They are just pretty patterns traced by the algorithmic bot computers, and setting the predetermined closing price for the day in that juggling act we see in the closing 10 minute "auction".

And your suggestion that we either get used to them or "get out of the kitchen" so to speak - that's exactly what I have done. I no longer trade. And people like Gottliebsen, Kohler, and a growing number of others are joining the chorus to ban algorithmic trading, particularly HFT, and perhaps shorting as well, to restore some semblance of faith to the markets in terms of those who want to invest rather than trade, and for the companies in which they invest who need to HAVE those investors for their capital.

Just call me disillusioned, after trading based on TA for a VERY long time. The bots have ruined it for me.



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Regards, NightStalker

Algorithmic trading, and HFT are rendering Technical Analysis null and void.

Said 'Thanks' for this post: arty  
 
 


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