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This will make you think. As much as I dislike HFT create wild swings and flash crashes i don't want to go back to this. Picture is worth a thousand words. See link below
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
why is it so many peoples, and countries want the USD $$$ to no longer function as the only reserve currency?
The British lost their Pound, as the other reserve currency,
The West Germans lost their DuecheMark as the other reserve currency,
We, in the US still pay for world security (with our overly inflated defense budget and high taxation upon all citizens for this).
We, in the US make countries like Costa Rica, which has NO standing army, and they proudly make that a point of international discussion, and other countries too. This frees up so many hundreds of millions of citizens in their respective countries, that are not pressed into mandatory or compulsory (ala South Korea, Malaysia, and so many other countries do) military service.
The question of what those citizens and countries do with their "of age" men / women, since they're not used similarly, namely for defense, like our country does, and others; what do they do?
The choice to supplant the US as the reserve currency doesn't seem likely, because the role covers more things politically, such as global influence (read into that, the ability to project one's power (read into that: military) across such a wide range of territories). This change of station, doesn't seem to be happening anytime soon.
US Treasuries, US Dollar denominated assets, real estate holdings and such, still receive the dubious notion, as described so often, when other currencies shake, rattle and roll, as "flight to safety" and other expressions similar to that.
When the British, pulled their budgets and balance sheets back into alignment, they withdrew from their projection of military power globally, and their influence, and the importance of holding their currency rolled back on their shores too.
There's no direct linkage between military projection of power and currency status (as either reserve or the denomination of choice), but there sure seems to be something tying the two topics together. On that same road and path are the Russians, and the Chinese, who are following the example of many years ago, what the US did.
Perhaps the RMB will continue to rise, what with their financial controls being loosened, for that reason.
Perhaps, you'll be trading the E-mini RMB just like we frequently discuss and trade the Euro.
Nothing like an uber-geek to defend why HFT is wonderful for all of us. What BS. Yeah, get me a HFT money printing machine & I'll get a lobbyist out to the unsuspecting and ill-(brain) equipped public too. Liquidity, my foot.
Trading: Equities, index options and futures/futures options
Posts: 190 since Apr 2010
Thanks Given: 66
Thanks Received: 198
Before the computers, everyone complained about being ripped off by the locals. Now that the pit has been replaced by computers, everyone complains about being ripped off by the bots. I sense a theme here.
I think the argument of HFT providing liquidity is interesting.
From my understanding, HFT's do not trade against each other. They trade primarily only against retail.
If you also look at the decline in volume and the rise of HFT, it would be difficult to say HFT is providing liquidity.
I think the decline in participation is because people are viewing markets as rigged, unwinnable scenarios, so they stop participating.
I also think dark pools are to blame. We are seeing more and more discussion of dark pools, and they are getting much bigger. This is like "Internet2", making a second internet that only the ultra-exclusive banks have access to, and putting all the best content there. It is faster that the original Internet, and is private - not visible to the eyes of regulation or outsiders.
If the dark pools are allowed to continue, then we will continue to see the decline of the public marketplace.
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
I think a lot of traders use the HFT's as an excuse to why they can't make money. In reality, a majority of these HFT's are participating in lightning fast transactions between the bid/ask spread on various markets or some sort of arb between different products. The majority of the HFT's are most likely present in individual stocks that have high daily volume. There have been examples where an algo goes haywire and sweeps the book creating some weird geometric chart pattern. I would say those are the one's that need to go away.
As long as HFT's do not change the overall market structure, one can still make money trading in the market. If the market were to become highly illiquid and traditional market structure becomes unrecognizable, that will be the time to move on to another market.
I remember when there were very little HFT's in the market and the DOM was a much more reliable tool. Now it's a bunch of fake orders flashing in and out. So, it's important to adapt to that change and look for tools that will help you see the true orders being executed vs. the tap dance being displayed in the DOM. Tracking cumulative delta has been the best way for me to watch the aggressiveness of buyers vs. sellers which is no longer clearly viewable in the DOM because of the use of Iceberg orders.
Here is an interesting paper on the effects of Dark Pools vs. lit trading venues. Pretty interesting.
