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I think you are willingly failing to understand what is being said by me and more people on the comments. This is not about exploiting a privileged access to m

I think you are willingly failing to understand what is being said by me and more people on the comments. This is not about exploiting a privileged access to market conditions (as in the sub millisecond access HFT firms have) in order to gain an advantage. This is about using machine learning to predict future (as in hours/days) moves on the market and take advantage of them.

SEJeff 10y ago
Yes and I think you are willingly failing to understand reality from someone who has worked in technology in finance for a long time. HFT or perhaps more accurately, Electronic Trading, is more than simply passive trading and "doing something faster than everyone else". That is a part of it absolutely, but the industry also hires people with PHDs in quantum physics, or builds supercomputers at national labs to build private ones, or teach mathematics at ivy league universities. For much of this math, speed is beneficial, but it isn't universally and always required. Speed is nice, but smarts are better. "Machine Learning" is the new buzzword for a way to mathematically deducing future outcomes based on data science and quantitative analysis. That is a grotesque simplifications and there are specific ways of approaching this (Tensorflow/Keras from Google, Torch from Facebook, etc). This could be nanoseconds in the futures, it could be hours, or even weeks / months. And this is the part you're failing to understand by trying to assume (incorrectly) that all HFT is made up of is bid sniping and latency arbitrage (often referred to as front running). It isn't really that privileged access if you yourself can pay any exchange, such as NYSE, for a feed to your house. TL;DNR: Your understanding of electronic / HFT trading is wrong. If you try to understand it first, you'll realize your statements bear absolutely no basis whatsoever in facts. Facts are that Electronic Trading firms have been using machine learning literally since the invention of machine learning and quantitative analysis to make money. A new firm trying to do this can simply join the club.
- kgwgk 10y ago
  > HFT or perhaps more accurately, Electronic Trading Electronic trading as opposed to what?
  - SEJeff 10y ago
    Click trading? Calling your broker and having them trade for you? Old school open outcry trading. Algorithmic Trading might be better?
    - kgwgk 10y ago
      Before you seemed to apply the term essentially to HFT only ("Most real electronic trading firms are putting those algorithms in hardware"), now it seems to include all the "systematic" trading. Or maybe only when fully automated? (I imagine low-frequency startegies might still require some human clicks). And even if I call my broker, and he clicks somewhere to enter the order, it's still executed by some HFT agent somewhere. And the same applies to low frequency strategies, I guess (why bother with the execution details, just use a broker).
- jbmorgado 10y ago
  Can you do HFT without a privileged connection to the trading system that beats most of the market players in access time? No. TL;DNR: You keep ignoring both the point of the comments and the point of the TFA. This is about market prediction, not technical exploitation of a privileged access to market.
  - digler999 10y ago
    > a privileged connection t anyone can buy co-located rack space.
    - jbmorgado 10y ago
      I'm not sure if you have some kind of cognitive impairment, that you still didn't get the point after I explained it 5 times already, so I'll explain it yet again as simply as possible: If you buy a co-located rack space you are using a PRIVILEGED CONNECTION to the market that and taking advantage of that using some algorithm: That's High Frequency Trading. The all point of TFA and the comments was the OPPOSITE: To be in a NON PRIVILEGED position (as in, the same access time to market transactions as the median of the access time to market of EVERYONE ELSE) and to use machine learning to predict market moves in a long enough term so that the market access time was irrelevant. Do you understand the complete difference between the two scenarios now?
      - digler999 10y ago
        calm down. anyone privileged enough to buy stocks is also privileged enough to buy colocated rack space. so yes, it's "privileged", just like everyone else.

SEJeff 10y ago

Yes and I think you are willingly failing to understand reality from someone who has worked in technology in finance for a long time. HFT or perhaps more accurately, Electronic Trading, is more than simply passive trading and "doing something faster than everyone else". That is a part of it absolutely, but the industry also hires people with PHDs in quantum physics, or builds supercomputers at national labs to build private ones, or teach mathematics at ivy league universities. For much of this math, speed is beneficial, but it isn't universally and always required. Speed is nice, but smarts are better. "Machine Learning" is the new buzzword for a way to mathematically deducing future outcomes based on data science and quantitative analysis. That is a grotesque simplifications and there are specific ways of approaching this (Tensorflow/Keras from Google, Torch from Facebook, etc). This could be nanoseconds in the futures, it could be hours, or even weeks / months. And this is the part you're failing to understand by trying to assume (incorrectly) that all HFT is made up of is bid sniping and latency arbitrage (often referred to as front running). It isn't really that privileged access if you yourself can pay any exchange, such as NYSE, for a feed to your house. TL;DNR: Your understanding of electronic / HFT trading is wrong. If you try to understand it first, you'll realize your statements bear absolutely no basis whatsoever in facts. Facts are that Electronic Trading firms have been using machine learning literally since the invention of machine learning and quantitative analysis to make money. A new firm trying to do this can simply join the club.

kgwgk 10y ago
> HFT or perhaps more accurately, Electronic Trading Electronic trading as opposed to what?
- SEJeff 10y ago
  Click trading? Calling your broker and having them trade for you? Old school open outcry trading. Algorithmic Trading might be better?
  - kgwgk 10y ago
    Before you seemed to apply the term essentially to HFT only ("Most real electronic trading firms are putting those algorithms in hardware"), now it seems to include all the "systematic" trading. Or maybe only when fully automated? (I imagine low-frequency startegies might still require some human clicks). And even if I call my broker, and he clicks somewhere to enter the order, it's still executed by some HFT agent somewhere. And the same applies to low frequency strategies, I guess (why bother with the execution details, just use a broker).
jbmorgado 10y ago
Can you do HFT without a privileged connection to the trading system that beats most of the market players in access time? No. TL;DNR: You keep ignoring both the point of the comments and the point of the TFA. This is about market prediction, not technical exploitation of a privileged access to market.
- digler999 10y ago
  > a privileged connection t anyone can buy co-located rack space.
  - jbmorgado 10y ago
    I'm not sure if you have some kind of cognitive impairment, that you still didn't get the point after I explained it 5 times already, so I'll explain it yet again as simply as possible: If you buy a co-located rack space you are using a PRIVILEGED CONNECTION to the market that and taking advantage of that using some algorithm: That's High Frequency Trading. The all point of TFA and the comments was the OPPOSITE: To be in a NON PRIVILEGED position (as in, the same access time to market transactions as the median of the access time to market of EVERYONE ELSE) and to use machine learning to predict market moves in a long enough term so that the market access time was irrelevant. Do you understand the complete difference between the two scenarios now?
    - digler999 10y ago
      calm down. anyone privileged enough to buy stocks is also privileged enough to buy colocated rack space. so yes, it's "privileged", just like everyone else.