read "Flash Boys" by Michael Lewis, very revealing on this...

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redsceptre

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06/04/17

14:44

Post #: 23908128
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Originally posted by ConcerndCitizen ↑

This is a very interesting article from 2012 about high-frequency trading, but it's arguably more relevant today than ever. I would credit the original poster if I could remember who they were - I think it came from the NUH forum.

http://www.smh.com.au/money/investing/share-wars-how-the-robots-are-robbing-you-20120825-24t4t.html

Some excerpts:

Self-automated algorithms can generate 150 trades in the blink of an eye and, unlike ordinary investors or even the big funds, have been given the ultimate privilege of plugging straight into the ASX's computer. They're the ultimate inside traders.
...
In any case, the ASX is compromised because it let the computers into its data room in the first place, lured by the prospect of fees on tiny - but relentlessly frequent - trades.
...
That used to be called insider trading. Now it's ''liquidity enhancement'' and it's legit.
...

Regulators around the world have been duped by speed-trading proponents, invariably stating that it ''adds liquidity'', which aids what has come to be called ''price discovery''.

The true price of a stock is revealed because, thanks to the computers trading with each other, there are more trades and depth in the market.
...
''What's price discovery? It's an invented term. It's just tripe,'' he says.

''High-frequency trading should be banned until the benefits can be proved. It can't be backed up with facts. From what I can see, it doesn't create liquidity, it destroys it.''

The price of a single share traded sure isn't going to tell you much. All it does is lift the cost of buying or selling shares.
...
SEVEN WAYS TO BEAT SPEEDTRADING
-Buy only quality stocks, and for the long-term.

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read "Flash Boys" by Michael Lewis, very revealing on this subject

RVR Price at posting: 21.3¢ Sentiment: None Disclosure: Not Held
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read "Flash Boys" by Michael Lewis, very revealing on this...

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