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> Algorithmic trading in the overnight market is rife with malicious tactics (bots try to discover and exploit stop orders, and in some cases bots are just tryi
by quickthrowman 6y ago
> Algorithmic trading in the overnight market is rife with malicious tactics (bots try to discover and exploit stop orders, and in some cases bots are just trying to "trick" other bots).
What makes this malicious?
Stop orders are just another source of liquidity, and they aren’t required. Don’t place your stop order in an obvious location, like right outside the local minima/maxima.
Orders are allowed to be canceled or adjusted, I probably cancel 5-6 orders for every fill when I’m trading, algos are just faster.
Keep in mind that when price moves, it may not be obvious to you why it did because there are participants with much better info than you that are faster as well.
- betterunix2 6y agoI think it is a bit malicious since there is no price discovery happening (and price discovery is the primary purpose of a market) and the trades are not based on any information at all, but we can disagree on what to call it. I do agree on the difficulty of knowing why prices move and the fact that other participants may have some knowledge I do not, and would even argue that it is probably more pronounced in the commodities market than the stock market because of insider trading rules and disclosure requirements.