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The Academy of Financial Trading
How To Trade ‘Black Box’ systems – High Frequency Trading
HFT explained
Any Advice or information provided by the Academy of Financial Trading is General Advice Only - It
does not take into account your personal circumstances, please do not trade or invest based solely
on this information. By viewing any material provided by the Academy of Financial Trading or using
any information or tools you agree that this is general educational material and you will not hold any
person or entity responsible for loss or damages resulting from the content or general advice provided
here by The Academy of Financial Trading, its employees, directors or fellow members. Futures,
Contracts for Difference (CFDs), Options, and spot currency trading have large potential rewards, but
also large potential risks. You must be aware of the risks and be willing to accept them in order to
invest in CFDs and leveraged forex markets. Don't trade with money you can't afford to lose. No
representation is being made that any account will or is likely to achieve profits or losses similar to
those discussed in any material provided by the Academy of Financial Trading. The past performance
of any trading system or methodology is not necessarily indicative of future results.
Risk Warning
High Frequency Trading – Algorithmic systems
HFT systems (Black Box Trading) – these systems are essentially the output of a human’s trading system being carried out by a PC which allows a much higher frequency of execution
These systems typically execute more trades per day than any human could physically do!
It is mostly used by larger investment banks and institutions – this commonly has led to the race to zero!
These systems typically can be very profitable but fail to include or allow room for human reasoning – something that is necessary for full risk mgmt.
Leveraging success from capital markets
HFT explained
The pros and cons – the why and why not
HFT systems are useful to one with a lot of capital, a lot of time and an exceptionally high execution speed – and this is expensive!
Those whom have implemented these systems usually test the same in their respective conditions – this makes it very tough to implement a realistic solution, or moreover replicate theirs
Some of these systems have been a major factor in the demise of some of the largest investment banks in the world – why?
The educated human is a force to be reckoned with!
Leveraging success from capital markets
HFT explained
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