@CTUCyberGroup Lesson: High Frequency Trades #CTU #Aftermarket
Today instead of going over what we did in the CyberGroup Live Trading Room I want to switch gears and go over something that has taken the financial industry as well as the news by storm, High Frequency Trading. I find it amazing that all of a sudden this is the most talked about subject on any financial channels you turn on, when any of my students will tell you I’ve been teaching for 20 years!
If you didn’t already know, over 50% of the trades that go off during the day are done by computers. Something some of my older students will remember this but we use to look for a dominant market makers in each stock, with the installation of ECN’s, or electronic communication networks, you can’t even see that anymore. When Goldman Sachs places an order, they run them through these ECN’s essentially hiding what they are doing. The use of computers doesn’t just stop at routing orders though, we are actually trading against computers. In the above picture you will see my execution system as well as my level III. Do you notice anything at $4.49? What about $4.59? It keeps going for every interval of 10 cents. Do you think it’s a coincidence that at each 10 cent interval someone wants exactly 5000 shares? The thing is, it’s no coincidence.
These HFT’s are a type of algorithmic trading, using sophisticated algorithms to quickly trade securities. By joining our free webinar tomorrow, you will not only learn how to find these, but as well learn how to use them to your advantage.