It's called colocation, and you put your server next to the exchange one, not across the street It's a must for HFT. Actually the NYSE servers are in New Jersey, not at the location most people associate with the stock market (the floor). Also, ...

Order Flow - Achieving the mindset

I said that M5 and M1 is hard because it's high-frequency territory. Hundreds of math, stats and physics Phd's are looking for patterns there, due to the huge coast line and high potential profitability. All the simple stuff is already exploited. ...

Order Flow - Achieving the mindset

You have no chance scalping M5 or lower where you go head to head with the machines. They will skin you. At the same time there is an excellent opportunity now in betting on a breach of 1.5 in EUR/USD. Experience comes into play in knowing how to do ...

Order Flow - Achieving the mindset

Good point, I'm a computer programmer and at work in the last two years I had in the corner of one of my screens a small MetaTrader open with EUR/USD, USD/JPY and S&P 500 D1 or H4 charts. I'm also following some financial streams on twitter. Since ...

Order Flow - Achieving the mindset - Part 2

You should also not confuse all trading in which computers act on their own with HFT. There are a lot of 100% automated trading systems which are not HFT, which act on timespans of days or months - for example automatically reading and interpreting ...

An Edge In The Markets

10,000 hours in 2 years = 14 hours/day (including on weekdays) 10,000 hours in 5 years = 6 hours/day (including on weekdays) The first one is not realistic for most people (which again shows that only the most dedicated ones can succeed by this ...

Order Flow - Achieving the mindset - Part 2

A general thought, not directed at anybody in particular. Not everybody can be a successful trader, just like not everybody can be a successful painter, athlete, tv star or poker player. Yes, I know, I'm stating the obvious, but too many times I've ...

Order Flow - Achieving the mindset - Part 2

Would you agree that computers replaced humans (specialists, dealers, ...) in market making? By volume computers are replacing humans. Computers are responsible for DECIDING more trades each year. Sure, there will still be human traders around, just ...

An Edge In The Markets

But ultra-low-latency trading by volume is 25% of the market and growing per the report. And what better to exploit human fallacies (round numbers, S&R trading, ...) than a computer, who can watch all the market for such events.

An Edge In The Markets

Algo is growing rapidly in FX. From the latest BIS report, it already accounts for 45% of EBS volume and HFT is 25% of whole market: url url

An Edge In The Markets

You discovered empirically exactly what Taleb recommends in "Fooled by Randomness". Many traders could benefit from this. I highlighted the relevant part: image

Order Flow - Achieving the mindset

Do you really believe that you would have understood the reason of the 5 pip movement if you weren't trading? You are saying that basically you have an explication for every 5 pip movement. Of course, there is an explanation: "somebody sold a lot" ...

Order Flow - Achieving the mindset

Carnagie, you seem to have a mindset in which you expect your trades to be absolutely perfect - nailing the bottom in this case. You realize that this is not gonna happen. OF is not a holy grail as you yourself said. Also, maybe you traded too much? ...

Order Flow - Achieving the mindset

To see what doesn't work

Why do you visit Forex Forums?

I started collecting all of the ScotiaFX PDF's in September last year. I have 352 as of now. When I'll have a full year I'll analyze them to see if they are usable in a systemic way.

Order Flow - Achieving the mindset

There are some simple methods to discriminate: assume all financial players are informed. Quote from url Indeed, our econometric analysis indicates consistently that customer spreads are widest for the trades least likely to be informed. ...

How dealers/market makers operate

Yes, the technicals are better, but you both mentioned the 3 months projection which is the fundamental section. The funniest thing is that their technical trend model is most of the times opposite to their fundamental value model. Unfortunately the ...

Order Flow - Achieving the mindset

UBS historical calls (inflection points) below. I'll let you judge how good they are. 2010-07-18: EURUSD 1m 1.20, 3m 1.15 We expect any support the euro receives in the run-up to the release of bank stress test results on July 23 to be short-lived. ...

Order Flow - Achieving the mindset

But this is what quants do. You're confusing me Proprietary indicators written 10 years ago, but which lost their edge are still better than proprietary indicators written 40 years ago which lost their edge. At least for seeing the way they ...

The Birth of a Quant Trader

No need to apologize, we were just having a friendly spar, right I remembered some posts with some reference books for algorithmic trading for Pipalicious: url url url You can also look at his blog-roll, maybe you find something that suits ...

The Birth of a Quant Trader