Video 05: Program trading

* What is program trading? * High frequency trading * Spoofing * Front running & HFTs

Artitrage Trading

• They trade the discrepancies between charts, seeking for small profit, and accumulate.

Price action can't hide

• Programs use small portion money to each buys.

• what is happening in the chart:

  • Bulls buy close price, when they see rally, bar by bar.

  • but there's no follow-through at the top now,

  • then repeatedly selling out at the top,

  • finally they give up

Spoof makes volumes useless

• They create fake orders to trick other firms, those firms make decisions on volumes will be spoofed.

• It is illegal now, but there are always variations on-going nowadays.

Front running

• They use a large order to buy just a little above you. they buy

• Many many times a day to make a lot of money.

Market is unfair?

• You and I makes up to only 5% in the market.

• Firms never care about us, they make money from other firms.

Don't find excuses!