So I met a guy who makes Algorithmic Trading Programs for High Frequency Trading

[niemivh]

It was at a political meet up group here in Portland.  I met a man who works for a company back east that works on writing Algorithms for automated trading systems.

The irony was that I was there trying to recruit people to help me build a Tobin Tax website.  What a small world.


He said the following:

Algorithmic trading is financial warfare.
Algorithmic trading is a financial arms-race.
It is really a form of 'scalping', and admitted that it serves no role whatsoever to anyone but the person doing the HFT
The average ratio of dollar-earned-to-dollar-lost is about 6-to-1, meaning that every 6 dollars they make they lose 1
He was working on an algorithm that was getting 30-to-1 and 40-to-1 ratios
He called the whole line of business a 'printing press'
He was a web-developer but sort of fell into this line of work, now he makes multiple times what he used to, he said there is nowhere else he could ever make the money he is now
It was clear he was making so much money writing short programs in visual pascal that it was probably over $100k, bare minimum, probably in the $100k to $200k range
But even what he was making paled in comparison to the true experts that work on algorithms for the biggest players (literal million dollar bonuses were given out)
He also told me that everyone he knows pays an incredibly low tax rate due to loopholes (18% for millionaires, etc)
He told me about a hedge fund managers plan to build an 'oil derrick' out in the mid Atlantic ocean (where there is no oil) directly over the fiber lines running between the Euro and London exchanges and the US just to get a 1/600th of a second lead on the rest of the market


I'm going back next week to learn more.  He laughed when I told him about the Tobin Tax plan, he said it would never work and that there are so many fortunes being made in this that there are literally armies of millionaires and billionaires that would oppose it.  I'm starting to believe him as the only 2 people that knew about HFT (High Frequency Trading) and algorithmic trading at that event were myself and him... and he worked for a company that did it.


Enjoy your 'free market'.

[1715567963]

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[MatthewLM]

Tobin tax website? I guessing you are for this monstrosity?

It is really a form of 'scalping', and admitted that it serves no role whatsoever to anyone but the person doing the HFT

I don't think he knows very much about markets then. As people make money from price changes, prices are smoothed out and reflect longer term pictures (HFT is short term however, longer term is for usual human investment).

[Murwa]

Tobin tax website? I guessing you are for this monstrosity?

It is really a form of 'scalping', and admitted that it serves no role whatsoever to anyone but the person doing the HFT

I don't think he knows very much about markets then. As people make money from price changes, prices are smoothed out and reflect longer term pictures (HFT is short term however, longer term is for usual human investment).

Making money everyday on markets is statistical improbability. Even the best day-traders have days on loses.

Free market is a code word for rigged market. Every empirical evidence suggest just that.

No one in his right mind promotes 'free market' so he exposes him-self to competition over basic resources needed to survive unless he is sure to win.

[MatthewLM]

If they don't make money, why would they do it?

[niemivh]

Tobin tax website? I guessing you are for this monstrosity?

It is really a form of 'scalping', and admitted that it serves no role whatsoever to anyone but the person doing the HFT

I don't think he knows very much about markets then. As people make money from price changes, prices are smoothed out and reflect longer term pictures (HFT is short term however, longer term is for usual human investment).

Not anymore.  I think I'll try to 'join them'.  All attempts to point out to the cow-people that they're being taken advantage of have been met with indigence and scorn.  I think I'll just pull up a stool and a bucket and start milking.

It's apparently what people want.  They don't feel useful unless they are being taken advantage of.

[tvbcof]

...
The average ratio of dollar-earned-to-dollar-lost is about 6-to-1, meaning that every 6 dollars they make they lose 1
He was working on an algorithm that was getting 30-to-1 and 40-to-1 ratios
He called the whole line of business a 'printing press'
...

Some things are not really jiving with other things I've run across (many of which may be wrong or overstated.)

I've heard that somewhere over half of the trades nowadays are algorithmic.  After a decade of going nowhere but backward, many flesh and blood people are exiting the game.

So, if 50% are high-speed algorithm trades and they have win rates of the numbers your friend claims, where's the money coming from?

Here is a hypothesis of mine which I believe is completely my own (vs. just thinking I invented it after reading or hearing it somewhere else):

What if the high-speed juggling act is a mechanism to deal with 'naked shorts' (aka 'strategic failures to deliver'.)  That would be paper which purposely was sold short and never borrowed.  Depending on who you listen to, the number of certs in that category is alarmingly large, and there is no way to determine if the shares in ones brokerage account are real or IOU's.   I hypothesis that keeping a large number of shares in motion helps avoid pesky reporting rules.  And the 'cops' are doing everything possible to avoid looking anyway.

[Palmdetroit]

Over 90% of all trades are algos.. only way to win is to not play.  as far as 'who's money is it' .. its yours..if you are wise enough to not directly invest, all those taxes you pay into public servant pensions gets pennied every millisecond and you pay the bill.


Check out "stop loss killa algo" here.. this is natural gas.... so you pay there as well

[hugolp]

Enjoy your 'free market'.

Nice strawman.

Enjoy the progresive Federal Reserve.

The progressive and conservative policies have taken us down this path, and you still have the audacity of blaming it on non-existing free markets? Do you have any kind of honesty limits or morals?

[cunicula]

Over 90% of all trades are algos.. only way to win is to not play.  as far as 'who's money is it' .. its yours..if you are wise enough to not directly invest, all those taxes you pay into public servant pensions gets pennied every millisecond and you pay the bill.


Check out "stop loss killa algo" here.. this is natural gas.... so you pay there as well

To give a simplified example, many institutional investors follow explicit divisions of their portfolio (say 60% stocks 40% bonds). They follow these rules to keep the risk-reward profile of their portfolio approximately constant.  If bonds go up in value, the institutional investor will have to rebalance their portfolio (sell some bonds, buy some stocks). The purpose of the algorithm and massive computing power is to predict the automated responses of these investors. If you can get in and buy the stocks a millisecond before the pension fund does, then you can profit by reselling the stock to the pension fund for at a tiny mark up. The pension fund pays slightly more for the asset than it would have if it had a faster computer.

I would be very happy with a block chain that raised revenue for maintenance purposes using a 0.1% tax on all transactions rather than by printing money like bitcoin. Is that what you are after?

[wumpus]

I don't think he knows very much about markets then. As people make money from price changes, prices are smoothed out and reflect longer term pictures (HFT is short term however, longer term is for usual human investment).

I don't think you can say anything about the effect in general. For the individual trading bot it depends on the algorithm and strategy. It can stabilize the price, but it can also cause instability (for example - fake a trend) and profit from that. And as there's zillion bots active all competing and reacting to each other, the overall emergent effect is hard to quantify. It's like trying to determine what you brain will do from studying one neuron.

[hugolp]

I don't think he knows very much about markets then. As people make money from price changes, prices are smoothed out and reflect longer term pictures (HFT is short term however, longer term is for usual human investment).

I don't think you can say anything about the effect in general. For the individual trading bot it depends on the algorithm and strategy. It can stabilize the price, but it can also cause instability (for example - fake a trend) and profit from that. And as there's zillion bots active all competing and reacting to each other, the overall emergent effect is hard to quantify. It's like trying to determine what you brain will do from studying one neuron.

Yep.

The real problem with bot trading is that the stock markets are willing to undo trades when a bot goes crazy. This way the bot owners have no incentive to make the bots better. If they lost big time everytime a bot goes crazy, they would think twice about using a bot or if the did, they would do it more carefully.

[MatthewLM]

If bots make more volatility rather than reduce it, them overall they lose money.

[kiba]

Let face it, there will be an exchange that allow bots even if all the other exchanges will not. Bitcoin economy is a free market.

[wallet.dat]

How do HFTs work?  What do they pay for a transaction?  I was thinking of writing my own bot to use with my Ameritrade account, but there's probably better tools to do this with.

[MatthewLM]

There are a few different platforms for algorithmic trading. Some use their proprietary programming languages and libraries and others use APIs. I don't know much about them but google will help. :-P

[Murwa]

Enjoy your 'free market'.

Nice strawman.

Enjoy the progresive Federal Reserve.

The progressive and conservative policies have taken us down this path, and you still have the audacity of blaming it on non-existing free markets? Do you have any kind of honesty limits or morals?

How freedom to trade with whatever techniques you want is not a "free market" policy ?

Reality sometimes is painful and i understand you may have some difficult time to adjust.

[hugolp]

How freedom to trade with whatever techniques you want is not a "free market" policy ?

Reality sometimes is painful and i understand you may have some difficult time to adjust.

First, we dont need your condescending tone here. Try speaking like a normal person.

Second, the free market works because of the price signals represent the real choices of the people. When you distort those signals the outcome is not a free market outcome, even when apparently were done "freely" by someone. Its a constant in history that when a inflationary period starts it develops a financial boom and fostering reckless speculation. The financial system in the western countries is completely out of control and hypertrofiated, and that is thanks to the progressive policies. You would not be seeing the crazyness or inequalities you see around in a free market.

I have already said that I dont have anything against HFT and the problems I see. I dont believe what the op is saying and he has demonstrated quite a few time that he has not much idea about economics and likes to go over the top. I know someone dedicated to HFT and he is not doing by far that kind of money. It could be that it just happens that the guy I know is very bad at his job I guess.

[Murwa]

Second, the free market works because of the price signals represent the real choices of the people. When you distort those signals the outcome is not a free market outcome, even when apparently were done "freely" by someone.

According to your own logic, free market can never happen because "freedom" gives ability to distort signal those signals ( for example speculation in general or HFT in particular )  or many more .

Its a constant in history that when a inflationary period starts it develops a financial boom and fostering reckless speculation. The financial system in the western countries is completely out of control and hypertrofiated, and that is thanks to the progressive policies. You would not be seeing the crazyness or inequalities you see around in a free market.

As you pointed out free market can never happen.

I have already said that I dont have anything against HFT and the problems I see. I dont believe what the op is saying and he has demonstrated quite a few time that he has not much idea about economics and likes to go over the top. I know someone dedicated to HFT and he is not doing by far that kind of money. It could be that it just happens that the guy I know is very bad at his job I guess.

Still my question has not been answered

How freedom to trade with whatever techniques you want is not a "free market" policy ?

[cbeast]

Enjoy your 'free market'.

Nice strawman.

Enjoy the progresive Federal Reserve.

The progressive and conservative policies have taken us down this path, and you still have the audacity of blaming it on non-existing free markets? Do you have any kind of honesty limits or morals?

How freedom to trade with whatever techniques you want is not a "free market" policy ?

Reality sometimes is painful and i understand you may have some difficult time to adjust.

It depends on the techniques you choose. Idealism doesn't make good policy in the real world. Ideologues rarely see beyond their bias and the repercussions of their actions. For instance, there comes a point in every civilization where trading with gold becomes trading with lead. At one point lead becomes more valuable than gold when your magazine is reaching empty and you are no longer thinking about your portfolio. The freedom to be greedy and wasteful is paid for by the blood of our forefathers and it is very disrespectful to abuse that freedom. Ideologues write interesting books, but make terrible policies.

[MatthewLM]

Second, the free market works because of the price signals represent the real choices of the people. When you distort those signals the outcome is not a free market outcome, even when apparently were done "freely" by someone.

According to your own logic, free market can never happen because "freedom" gives ability to distort signal those signals ( for example speculation in general or HFT in particular )  or many more .

Who would want to waste their money distorting prices? High frequency trading algorithms make money buying low and sell high (Or going long low and short high) just like any other trading. Human traders help long term prices buy holding positions in investments which they believe are undervalued for the future. High frequency trading works upon the short term noise.

[LightRider]

http://youtu.be/TDaFwnOiKVE

[hugolp]

Second, the free market works because of the price signals represent the real choices of the people. When you distort those signals the outcome is not a free market outcome, even when apparently were done "freely" by someone.

According to your own logic, free market can never happen because "freedom" gives ability to distort signal those signals ( for example speculation in general or HFT in particular )  or many more .

Sorry, I though I was talking with someone who knows the basics. Let me explain:

If you make a voluntary choice, that is not using violence or thread of violence, you are not distorting the singals. You are peacefully cooperating.

If you foce people to make some decisions or deprive them of options using violence or thread of violence then you are distorting the signals in the market because people is not choosing according to their needs but forced.

Now try again.

EDIT: And let me clarify again because I think you did not get it. I did not say HFT is not free market. What I said is the way is used today and in general the state of the whole financial system is not a free market outcome, but an outcome of the progressive/conservative policies.

[Murwa]

Sorry, I though I was talking with someone who knows the basics. Let me explain:

If you make a voluntary choice, that is not using violence or thread of violence, you are not distorting the singals. You are peacefully cooperating.

If you foce people to make some decisions or deprive them of options using violence or thread of violence then you are distorting the signals in the market because people is not choosing according to their needs but forced.

So what you saying is that for example JP MORGAN selling silver naked short is a peaceful cooperation and its is not distortion of price of any kind ??  

EDIT: And let me clarify again because I think you did not get it. I did not say HFT is not free market. What I said is the way is used today and in general the state of the whole financial system is not a free market outcome, but an outcome of the progressive/conservative policies.

Well i responded to someone who claimed that HFT is not a free market.

[hugolp]

So what you saying is that for example JP MORGAN selling silver naked short is a peaceful cooperation and its is not distortion of price of any kind ??  

Ok, back to basics again. As a friendly advise let me tell you that if you try you will see that reading some books is more effective than posting a lot of emoticons.

The banking system in most developed economies is an oligopoly around the government created money monopolly. The banks receive several privileges on the issuances of currency from the government and this regulations that the government grants to the banks are imposed through violence or thread of violence. The way the banking system is regulated is far more complicated, but this is a start.

Btw, Im not claiming that anything represents a incredible distorsion of the free market. During history there has been some periods with some mild regulations but they were close to a free system. But the present monetary and financial system is the opposite to a free market money system. We live under a government money monopolly, which is the opposite extreme.

Well i responded to someone who claimed that HFT is not a free market.

You were answering to me and misrepresented what I was saying. Its all there so go back and check.

[crispy]

...the present monetary and financial system is the opposite to a free market money system. We live under a government money monopolly, which is the opposite extreme.

If you think it's a "free market" system, then just try to open your own stock exchange or bank, or IPO your own stock on Ebay or Craigslist!

And yes, I'm aware of GLBSE.com.  How long do you think they'd last if they accepted currencies other than BTC?

[niemivh]

Tobin tax website? I guessing you are for this monstrosity?

It is really a form of 'scalping', and admitted that it serves no role whatsoever to anyone but the person doing the HFT

I don't think he knows very much about markets then. As people make money from price changes, prices are smoothed out and reflect longer term pictures (HFT is short term however, longer term is for usual human investment).

Making money everyday on markets is statistical improbability. Even the best day-traders have days on loses.

Free market is a code word for rigged market. Every empirical evidence suggest just that.

No one in his right mind promotes 'free market' so he exposes him-self to competition over basic resources needed to survive unless he is sure to win.

These aren't day traders, it's algorithmic trading.  BIG difference.  You know there is a 'market failure' when they want to build an oil-derrick in the middle of the Atlantic just to get a slight edge on currency exchanges.  It's utter madness.  For those of you who like Max Keiser, he recently glossed in one of this weeks broadcasts that algorithmic trading and HFT has broken the price discovery mechanism that should exist in markets.

Indeed "Free market" is code, I'm glad you can see that fraud.  Free Market is only selectively used, it truly has no friends or lobbyists of its own (other than the 'true believers' that constitute a large percentage of this forum) due to the built in class conflict that will and always will exist in any system of political economy.  Meaning that when it benefits the big players to use the 'Free Market' myth to continue their exploitation then it is employed, but equally they have no problem taking bailout money and socializing the losses.

[niemivh]

Over 90% of all trades are algos.. only way to win is to not play.  as far as 'who's money is it' .. its yours..if you are wise enough to not directly invest, all those taxes you pay into public servant pensions gets pennied every millisecond and you pay the bill.


Check out "stop loss killa algo" here.. this is natural gas.... so you pay there as well

Excellent point my friend.

Nobody is immune to this fraudulent behavior going on.  We are all paying for it.  This "printing press" that the man I spoke to is not a printing press at all, it is a financial drain on the real economy.   We already have enough problems without minting a new millionaire a day in this 'gold rush of algorithmic trading' for LITERALLY DOING NOTHING OF ANY PRODUCTIVE OR SOCIAL CONSIDERATION! 

After a period of brief fallout, I'm more committed than ever in trying to raise awareness to this scam.

For those that would like to help and have any skills to lend, please send me a PM.  Thanks.

[niemivh]

Enjoy your 'free market'.

Nice strawman.

Enjoy the progresive Federal Reserve.

The progressive and conservative policies have taken us down this path, and you still have the audacity of blaming it on non-existing free markets? Do you have any kind of honesty limits or morals?

I don't enjoy the Federal Reserve at all; why should I?  I'm not a rich Wall St. banker who are the beneficiaries of the existing system.  A system that was set up by and for them by the spineless dupe President Wilson.  That is the problem with the Fed, if it was chartered with a nationalistic interest for promoting economic growth and development like the 1st and 2nd Banks of the United States then we would be having a different conversation.  For those chanting "End the Fed", I say "Nationalize the Fed" and use it for the public good as we have before with previous banks and how many other industrialized modern nations have done so in their best interests.

Point being is that the "free market" myth is oft-employed in defense of these actions, as it was as a defense mechanism against the Tobin Tax (and taxes in general regardless of the merit or lack thereof of the tax in question).  It's the selective use of this myth that is one half of the problem.  The other half being (as we've gone over at length about) is that it (the "Free Market") never existed and, worse yet, is insofar undefinable; at least, to the challenge I've made of defining it nobody has been willing to do so.  From what I've seen I'd include you as a 'true believer' of the Free Market.  So please, please, please define what you mean by a Free Market on a new thread.  Maybe we can end this confusion once and for all.

The progressive and conservative policies have taken us down this path?  How so?  What path are you specifically referring to?

[niemivh]

If bots make more volatility rather than reduce it, them overall they lose money.

Overly simplistic statement is overly simplistic.

[niemivh]

Let face it, there will be an exchange that allow bots even if all the other exchanges will not. Bitcoin economy is a free market.

If a bunch of millionaires and billionaires want to gamble and have an exchange to which they can stab each other in the back then let them be my guest.  It is keeping them away from the 'host body' of the Real Economy that should be the prerogative.  I'm sure their interest would either wane or be snuffed out, with regards to HFT, from not being able to suck off the "printing press" that constitutes the Real Economy to which all of us pay the toll either directly or indirectly.  Of course we have to get over our childlike understanding that 'Taxes are Evil' and should adopt the adult and socially constructive approach, which is to 'tax evil' (ie, things that are socially destructive).


At risk of rising the ire of the Keynes haters (those that can't agree with anything he said) I'll just leave this right here:
"Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation".
-JMK

[niemivh]

How freedom to trade with whatever techniques you want is not a "free market" policy ?

Reality sometimes is painful and i understand you may have some difficult time to adjust.

First, we dont need your condescending tone here. Try speaking like a normal person.

Second, the free market works because of the price signals represent the real choices of the people. When you distort those signals the outcome is not a free market outcome, even when apparently were done "freely" by someone. Its a constant in history that when a inflationary period starts it develops a financial boom and fostering reckless speculation. The financial system in the western countries is completely out of control and hypertrofiated, and that is thanks to the progressive policies. You would not be seeing the crazyness or inequalities you see around in a free market.

I have already said that I dont have anything against HFT and the problems I see. I dont believe what the op is saying and he has demonstrated quite a few time that he has not much idea about economics and likes to go over the top. I know someone dedicated to HFT and he is not doing by far that kind of money. It could be that it just happens that the guy I know is very bad at his job I guess.

Well if you don't believe me that's fine.  Nothing I can do about that.  But,

I'm not so childish to tell everyone who doesn't agree with me that they don't know what they are talking about and are economic illiterates as you are basically doing here.  I just try and make my points as clearly and well-though out as possible and expect the same of others. 

I've given you previous opportunity to clarify your positions on topics in the past.  You have declined to do so with any depth or to answer my subsequent questions on the topic when you do so.

For instance I've challenged you to define your oft-used canard of "The Free Market".  You have yet to do so.  I know that is a rather large project and might take a few pages to write but if you aren't up to the task then please don't reference this as if you think we all have a clear idea of what you mean.  We don't.  There is no singular definition of this term yet you use it incessantly.

Please define your terms.  Please try and make 1 point per post rather than alluding to 4 or 5 points per post.

Thank you.

[niemivh]

Second, the free market works because of the price signals represent the real choices of the people. When you distort those signals the outcome is not a free market outcome, even when apparently were done "freely" by someone.

According to your own logic, free market can never happen because "freedom" gives ability to distort signal those signals ( for example speculation in general or HFT in particular )  or many more .

Its a constant in history that when a inflationary period starts it develops a financial boom and fostering reckless speculation. The financial system in the western countries is completely out of control and hypertrofiated, and that is thanks to the progressive policies. You would not be seeing the crazyness or inequalities you see around in a free market.

As you pointed out free market can never happen.

I have already said that I dont have anything against HFT and the problems I see. I dont believe what the op is saying and he has demonstrated quite a few time that he has not much idea about economics and likes to go over the top. I know someone dedicated to HFT and he is not doing by far that kind of money. It could be that it just happens that the guy I know is very bad at his job I guess.

Still my question has not been answered

How freedom to trade with whatever techniques you want is not a "free market" policy ?

I've challenged this person to define "Free Market" many times.  He never does it.  Yet, I've just challenged him again to it, let's hope he's up for it this time; yet I sense he won't be.  Just like Hayek, Freidman, Hazlitt and others never define it.  Because if they did one would realize that it doesn't exist or has no tangible meaning.  It is a blast of rhetorical hot air that politicians, economists and other vested interests use to dupe a populace into trusting "the market" (a body dominated by the largest fish composed of massive power players, cartels and monopolies) over the population.  If you put it in those terms then obviously nobody would sign up for it.

[The_JMiner]

I've challenged this person to define "Free Market" many times.  He never does it.  Yet, I've just challenged him again to it, let's hope he's up for it this time; yet I sense he won't be.  Just like Hayek, Freidman, Hazlitt and others never define it.  Because if they did one would realize that it doesn't exist or has no tangible meaning.  It is a blast of rhetorical hot air that politicians, economists and other vested interests use to dupe a populace into trusting "the market" (a body dominated by the largest fish composed of massive power players, cartels and monopolies) over the population.  If you put it in those terms then obviously nobody would sign up for it.

Does not free market mean being able to sell/buy whatever I want at whatever price I want? That is pretty much my definition of free market. No floor/ceiling on prices and no restrictions on what to sell/buy. ??

[niemivh]

Second, the free market works because of the price signals represent the real choices of the people. When you distort those signals the outcome is not a free market outcome, even when apparently were done "freely" by someone.

According to your own logic, free market can never happen because "freedom" gives ability to distort signal those signals ( for example speculation in general or HFT in particular )  or many more .

Who would want to waste their money distorting prices? High frequency trading algorithms make money buying low and sell high (Or going long low and short high) just like any other trading. Human traders help long term prices buy holding positions in investments which they believe are undervalued for the future. High frequency trading works upon the short term noise.

False.

https://bitcointalk.org/index.php?topic=25154.0

[niemivh]

I've challenged this person to define "Free Market" many times.  He never does it.  Yet, I've just challenged him again to it, let's hope he's up for it this time; yet I sense he won't be.  Just like Hayek, Freidman, Hazlitt and others never define it.  Because if they did one would realize that it doesn't exist or has no tangible meaning.  It is a blast of rhetorical hot air that politicians, economists and other vested interests use to dupe a populace into trusting "the market" (a body dominated by the largest fish composed of massive power players, cartels and monopolies) over the population.  If you put it in those terms then obviously nobody would sign up for it.

Does not free market mean being able to sell/buy whatever I want at whatever price I want? That is pretty much my definition of free market. No floor/ceiling on prices and no restrictions on what to sell/buy. ??

How does a "Free Market" system work in regards to banking? 

Maybe that's the simpler question to ask.

[MatthewLM]

Does not free market mean being able to sell/buy whatever I want at whatever price I want?

If you can agree a price with a buyer/seller.

[LightRider]

A monetary system will consistently incur corruption, abuse, waste, fraud and destruction. I suggest you look into a resource based economy if you really want to end this class of problem. You can learn more about it at www.thevenusproject.com and www.thezeitgeistmovement.com. Check out the documentary films Zeitgeist: Addendum and Zeitgeist Moving Forward also. As evidenced by recent events, the monetary system is not going to be sustainable in any meaningful time frame.

[Murwa]

Does not free market mean being able to sell/buy whatever I want at whatever price I want? That is pretty much my definition of free market. No floor/ceiling on prices and no restrictions on what to sell/buy. ??

Can i buy slaves ? I Really wish i could.

I hope free market happens.

[The Script]

Second, the free market works because of the price signals represent the real choices of the people. When you distort those signals the outcome is not a free market outcome, even when apparently were done "freely" by someone.

According to your own logic, free market can never happen because "freedom" gives ability to distort signal those signals ( for example speculation in general or HFT in particular )  or many more .

Its a constant in history that when a inflationary period starts it develops a financial boom and fostering reckless speculation. The financial system in the western countries is completely out of control and hypertrofiated, and that is thanks to the progressive policies. You would not be seeing the crazyness or inequalities you see around in a free market.

As you pointed out free market can never happen.

I have already said that I dont have anything against HFT and the problems I see. I dont believe what the op is saying and he has demonstrated quite a few time that he has not much idea about economics and likes to go over the top. I know someone dedicated to HFT and he is not doing by far that kind of money. It could be that it just happens that the guy I know is very bad at his job I guess.

Still my question has not been answered

How freedom to trade with whatever techniques you want is not a "free market" policy ?

I've challenged this person to define "Free Market" many times.  He never does it.  Yet, I've just challenged him again to it, let's hope he's up for it this time; yet I sense he won't be.  Just like Hayek, Freidman, Hazlitt and others never define it.  Because if they did one would realize that it doesn't exist or has no tangible meaning.  It is a blast of rhetorical hot air that politicians, economists and other vested interests use to dupe a populace into trusting "the market" (a body dominated by the largest fish composed of massive power players, cartels and monopolies) over the population.  If you put it in those terms then obviously nobody would sign up for it.

The concept of the "free market" is very well defined.  Rothbard defines it here, the wikipedia definition is clear and accurate, Mises talks extensively about what markets are and what the "free" market is in Human Action, and I would simply define it as the sum of all voluntary trades and exchanges between individuals and privately owned companies.

[cunicula]

Does not free market mean being able to sell/buy whatever I want at whatever price I want? That is pretty much my definition of free market. No floor/ceiling on prices and no restrictions on what to sell/buy. ??

Can i buy slaves ? I Really wish i could.

I hope free market happens.

in some parts of Africa, those particularly free parts, you can. Here's to hoping the ann rand types move to Southern Sudan. No big government to worry about there. Freedom got an AK true, but it is a small price to pay for utopia. I'm willing to contribute to one way tickets. Kindness of my heart and hoping you fulfill your dreams and all. 

[mobodick]

Sorry, I though I was talking with someone who knows the basics. Let me explain:

If you make a voluntary choice, that is not using violence or thread of violence, you are not distorting the singals. You are peacefully cooperating.

If you foce people to make some decisions or deprive them of options using violence or thread of violence then you are distorting the signals in the market because people is not choosing according to their needs but forced.

Holy crap what a load of bull.
You expect peacefull cooperation in a place where you make money off of other peoples bad decisions?

"Con-gra-tu-lations, good Sir. You've just aquired all my moneys. I'll hand them over to you with a smile on my face. I bid you farewell."

I think it's you who doesn't understand the basics.
free market = dog eats dog.

Signals, the way you describe them, are nonsense.
You expect the market to tell you "hey, now you can make money".
But that money comes from someone else who has to lose it.
That person does not want to lose their money and that makes them a direct competitor of your profits.
You have no 'right' to a certain 'signal'. The signals you talk of are just observations in certain situations. They are not universal laws of physics!
If you think there should be some signals that will tell you the one and only correct way then you have no idea what is going on.
Signals are observations and NEED INTERPRETATION which is your responsibility, not the markets.
Demanding some form of undistorted signals is like demanding a pair of aces at a blackjack table.
It is just not how it works.

[mobodick]

The concept of the "free market" is very well defined.  Rothbard defines it here, the wikipedia definition is clear and accurate, Mises talks extensively about what markets are and what the "free" market is in Human Action, and I would simply define it as the sum of all voluntary trades and exchanges between individuals and privately owned companies.

Haha, but can you define voluntary?
There has been a lot of discussion about the concept of free will as of late.
It turns out the concept of free will is terribly hard to define in detail.

For instance, for a voluntary movement of your arm, your arms muscles will receive a 'move' signal PRIOR to the concious part of your brain processing it.
You THINK you took a voluntary choice, yet your arm moved before you were aware of your choice.
So, is this free will, and if so, who's will is it?

And since the term voluntary relies on the concept of free will, what does that tell us about voluntary trades?

[rotrott]

The average ratio of dollar-earned-to-dollar-lost is about 6-to-1, meaning that every 6 dollars they make they lose 1
He was working on an algorithm that was getting 30-to-1 and 40-to-1 ratios

I hate to jump into a post where so many things are going on and so late, but here I am anyways.

I would stop talking with a guy a just met at an event as soon as I heard something like this.  "Here's the amount average people earn, but I earn 5 times more, I'm awesome".  People who are exceptional don't brag about being exceptional.  You're wasting your time if you want to follow this guy.

[The Script]

The concept of the "free market" is very well defined.  Rothbard defines it here, the wikipedia definition is clear and accurate, Mises talks extensively about what markets are and what the "free" market is in Human Action, and I would simply define it as the sum of all voluntary trades and exchanges between individuals and privately owned companies.

Haha, but can you define voluntary?
There has been a lot of discussion about the concept of free will as of late.
It turns out the concept of free will is terribly hard to define in detail.

For instance, for a voluntary movement of your arm, your arms muscles will receive a 'move' signal PRIOR to the concious part of your brain processing it.
You THINK you took a voluntary choice, yet your arm moved before you were aware of your choice.
So, is this free will, and if so, who's will is it?

And since the term voluntary relies on the concept of free will, what does that tell us about voluntary trades?

The fact that there are both unconscious and conscious movements of muscles doesn't negate the idea of voluntary choice and free will.  Your body can react to stimuli and will move before your conscious recognizes this, but you are also capable of deciding to move your arm in advance of actually moving it.  If you don't believe me:  Keep your arms perfectly still.  Now think "I am going to move my arm" but don't move it.  NOW move it.  Did it work?  Did you have the free will to move your arm or is every move of ours predestined and ordered for us?  Or is this a trick question since I TOLD you to move it? 

[mobodick]

The concept of the "free market" is very well defined.  Rothbard defines it here, the wikipedia definition is clear and accurate, Mises talks extensively about what markets are and what the "free" market is in Human Action, and I would simply define it as the sum of all voluntary trades and exchanges between individuals and privately owned companies.

Haha, but can you define voluntary?
There has been a lot of discussion about the concept of free will as of late.
It turns out the concept of free will is terribly hard to define in detail.

For instance, for a voluntary movement of your arm, your arms muscles will receive a 'move' signal PRIOR to the concious part of your brain processing it.
You THINK you took a voluntary choice, yet your arm moved before you were aware of your choice.
So, is this free will, and if so, who's will is it?

And since the term voluntary relies on the concept of free will, what does that tell us about voluntary trades?

The fact that there are both unconscious and conscious movements of muscles doesn't negate the idea of voluntary choice and free will.  Your body can react to stimuli and will move before your conscious recognizes this, but you are also capable of deciding to move your arm in advance of actually moving it.  If you don't believe me:  Keep your arms perfectly still.  Now think "I am going to move my arm" but don't move it.  NOW move it.  Did it work?  Did you have the free will to move your arm or is every move of ours predestined and ordered for us?  Or is this a trick question since I TOLD you to move it?  

Well, the weird thing is that altho you THINK that was a COUNCIOUS desicion the actual consiousness machinery doesn't come into action untill after the muscles got their command to move.
So it seems consciousness is an afterthourgh to your subconciousnes's action.
Or so the research says.

There was this test conducted (not sure where to find it now, but http://en.wikipedia.org/wiki/Neuroscience_of_free_will seems to agree with me) that presented a choice to the test taker.
The test taker then had to point out their choice.
And they found that the choice was already made before the subject could become aware of their choice.
So conciousness may be an illusion of control!

Same goes for reasoning.
There is this part of your brain that is specialized in comming up with explanations based on available information.
It does not care if the reasoning is sane or complete or for that matter even possible in reality (checking that is the task of another region of the brain).

There were some very interesting tests done with people with split brains (the region in question resides on one side of the brain)
By feeding both halfs of the brain different information one half of the brain (that included that mechanism) was coaxed to make up a BS story about what the other part was doing.
See the 3rd paragraph of http://en.wikipedia.org/wiki/Split-brain .
What is left out here is that the half that delt with the chicken contained the 'explanation mechanism' and so it made up a story that included the chicken (because that information was available) to explain the other halfs actions.

So we make up some guestimate explanations and THEN have to check them against reality and available information.
But we are quite capable of convincing ourselfs of stories we make up ourselfs!

I find all this very interesting when watching a phenomenon like bitcoin and people doing all this decision making