As HFT continues to speed trading up, I continue to look for ways to slow down

• Posted by chicagosean
• on August 3rd, 2010

Do you think this setup can compete against the Evil High Frequency Robots?

Like the perfect political debate, all sides of this issue are both right AND wrong. Beauty, eh?

The side I’ve taken is: I couldn’t care less.

Humble little me with my modest thinkorswim trading account can’t possibly hope to compete against the Robots on speed. Not a chance. So why even try? As trading continues to speed up to unfathomable heights measured in micro-nanoseconds, I keep my focus on trying to find ways to  s l o w  d o w n my trading.

I began trading in 1997. In 1998, I joined an equity daytrading firm where the modis operandi was to execute as many trades as you possibly can, as quickly as you can. Trading 100 share lots and 1000 share lots in-and-out, over and over again, scalping “teenies” and “eighths” as we called them then (before decimalization). I would have days where I executed nearly one million shares, yet ended the day with no position. That was the goal. If I could just have the commission dollars back from those years, I would currently be a very wealthy man.

I have spent the remainder of my career attempting to UNlearn many of the lessons I learned during those Go-Go Internet Bubble years.

Attempting to compete against robots in today’s market structure for better fills on the bid or offer is at once a futile effort as well as a sure road to the nut house. The Bots will cut your throat for a PENNY! My twitter stream is littered with Traders who are at their wits’ end ready to throw their monitors out the window at their latest raping at the hands of an evil HFT robot.

Me? Well, I’ve significantly (almost completely) reduced my dependence on tick-by-tick trading data. And I typically only trade once per day – if at all – just to adjust my position. My goal is to someday become completely untethered to my desk. With only something as simple as a smart-phone, I hope to one day be traveling all around North America for months at a time with no plan, no schedule, and no deadlines – trading from the road. The technology is there. I could do it right now. But not yet. Wife and I need to get the rest of our “house” in order before we can accomplish that. But it’s #1 on my Bucket List, and it will be done. Perhaps you’ll join us on the road?

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