thoughts on HFT trading advantages | Bitcointalksearch.org

Argwai96

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Quote from: wuzamarine on November 20, 2014, 03:01:28 PM

I am curious about what the possible advantages would be to programming an HFT trading app.
Any pre designed software has an update time of about 45 sec.
If you made a scalping app, continuously playing the spread, buy low/sell high, always picking up nickles and dimes, what would be the advantages or disadvantages?
I see algorithmic trading on Cryptsy all the time, but none appear beefed up for speed.

If you are trying to build a HFT app then you are doing it wrong. If you are going to try to "HFT" then you will need to invest in infrastructure that is physically located very close to the data center/trading engine of a major exchange. This would allow you to get information the exchange is providing sooner then other market participants

TinaK

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Cryptsy aha, I just click the link which I prompted to click, and then they freeze my account, so wonderful work Angry

jonald_fyookball

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they can try to predict it. but it is competitive and they can be wrong. there a a plethora of different strategies and algorithms and the market is always changing. trading (on any time frame) is a zero sum game. there will always be winners and losers. to say that they are "generally profitable" isn't accurate IMO.

scarsbergholden

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Quote from: jonald_fyookball on November 22, 2014, 07:59:38 PM

even if you could have true HFT, it is not necessarily advantageous, just a different style of trading. There are numerous HFT firms on the major trading exchanges (stocks, forex) that lose money and fail.

Generally speaking high frequency trading firms/hedge funds are profitable as they can accurately predict the very short term future of both prices and the order book allowing them to have a small short term advantage. The HFT benefits because they are able to profit from their investment in the technology and infrastructure while the market benefits from the added liquidity that HFT funds profide

Meuh6879

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and cost milliards in fee transactions ... Grin

jonald_fyookball

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even if you could have true HFT, it is not necessarily advantageous, just a different style of trading. There are numerous HFT firms on the major trading exchanges (stocks, forex) that lose money and fail.

Serge

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once you start querying exchanges api's you'll notice how slow they are or don't update output in some instances in real time.

alc

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Quote from: Rannasha

Bitcoin exchanges are far too slow for actual "high-frequency trading".

Yeah, many orders of magnitude so. There's also risk inherent in trying - people used to arbitrage Gox against other exchanges. Profit was slow in arriving, but consistent (thanks, Markus!), right up until it wasn't. I doubt there was a happy ending for most who were doing so.

wuzamarine

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Quote from: Rannasha on November 20, 2014, 05:15:18 PM

Bitcoin exchanges are far too slow for actual "high-frequency trading". For regular HFT, milliseconds may matter, while on most cryptocurrency exchanges you're lucky if you can get a response within half a second for placing an order. Fetching things like the order book often takes longer and many exchanges have tight limits on how often you can query the API.

HFT just refers to taking advantage of a timing difference for profit.

If you move your VPS closer to a Cryptsy server for the purposes of getting updates sooner, technically you are dealing with a HFT environment.
No much, but still.

The only difference between Cryptsy and NASDAQ servers is Jersey.
Both are Linux
Both use socket technology
Both do the same job.

Rannasha

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Bitcoin exchanges are far too slow for actual "high-frequency trading". For regular HFT, milliseconds may matter, while on most cryptocurrency exchanges you're lucky if you can get a response within half a second for placing an order. Fetching things like the order book often takes longer and many exchanges have tight limits on how often you can query the API.

wuzamarine

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derp

Quote from: cr1776 on November 20, 2014, 04:37:24 PM

Quote from: wuzamarine on November 20, 2014, 04:16:00 PM

Quote from: cr1776 on November 20, 2014, 03:07:30 PM

Have you read Flash Boys by Michael Lewis? You might get some ideas in there that could be applied. I think there is a question of whether any of the bitcoin markets are liquid enough at the moment though. :-)

even if you are you picking up nickle and dimes all the time on a market, there are hundreds of markets.

Exactly. They add up quickly as long as you can execute the trades properly.

the algorithm for a scalping seems very straight forward.
buy coin
calculate fee
is lowest sale price still a profit?
if yes{
post sale .00000001 lower than lowest seller
}
if no {
do nothing, leave it on the board.
}

cr1776

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Quote from: wuzamarine on November 20, 2014, 04:16:00 PM

Quote from: cr1776 on November 20, 2014, 03:07:30 PM

Have you read Flash Boys by Michael Lewis? You might get some ideas in there that could be applied. I think there is a question of whether any of the bitcoin markets are liquid enough at the moment though. :-)

even if you are you picking up nickle and dimes all the time on a market, there are hundreds of markets.

Exactly. They add up quickly as long as you can execute the trades properly.

wuzamarine

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derp

Quote from: cr1776 on November 20, 2014, 03:07:30 PM

Have you read Flash Boys by Michael Lewis? You might get some ideas in there that could be applied. I think there is a question of whether any of the bitcoin markets are liquid enough at the moment though. :-)

even if you are you picking up nickle and dimes all the time on a market, there are hundreds of markets.

cr1776

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Have you read Flash Boys by Michael Lewis? You might get some ideas in there that could be applied. I think there is a question of whether any of the bitcoin markets are liquid enough at the moment though. :-)

wuzamarine

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derp

I am curious about what the possible advantages would be to programming an HFT trading app.
Any pre designed software has an update time of about 45 sec.
If you made a scalping app, continuously playing the spread, buy low/sell high, always picking up nickles and dimes, what would be the advantages or disadvantages?
I see algorithmic trading on Cryptsy all the time, but none appear beefed up for speed.

Topic: thoughts on HFT trading advantages (Read 1367 times)