High-frequency trading (HFT) coming to bitcoin

[Moebius327]

"High-speed telecommunications provider Perseus Telecom and digital currency trading platform Atlas ATS formally launched Wednesday a globally integrated bitcoin exchange system in New York, Hong Kong and Singapore to facilitate trading in the digital currency by high-frequency trading firms and other large financial institutions."

Source: http://online.wsj.com/news/articles/SB10001424052702303795904579433222564439410?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303795904579433222564439410.html
Exchange: https://atlasats.com/

High-frequency trading (HFT) is a type of algorithmic trading, specifically the use of sophisticated technological tools and computer algorithms to rapidly trade securities. HFT uses proprietary trading strategies carried out by computers to move in and out of positions in seconds or fractions of a second.[5] Firms focused on HFT rely on advanced computer systems, the processing speed of their trades and their access to the market.[6]

As of 2009, studies suggested HFT firms accounted for 60-73% of all US equity trading volume, with that number falling to approximately 50% in 2012.

Source: http://en.wikipedia.org/wiki/High-frequency_trading

Documentary on HFT: http://www.youtube.com/watch?v=GEAGdwHXfLQ


Combined with Lawsky's statement from yesterday, suggests Wall Street is coming to us. Not sure if good or bad. What do you think?

[Dalmar]

It would make technical analysis easier, as the chart resemble traditional TA more, and less noobish spikes up and down.

[Maxxt]

Noobs ARE the ones, whose behaviour can be analysed and predicted with TA.
HTF makes markets more volatile but that's not bad. More trading = more "quick" liquidity

[Dalmar]

Noobs ARE the ones, whose behaviour can be analysed and predicted with TA.
HTF makes markets more volatile but that's not bad. More trading = more "quick" liquidity

Nope, the more noobs you have and less pro-traders the charts resemble traditional TA less and less. Just compare the early days bitcoin chart to the current one.

[Luno]

Noobs ARE the ones, whose behaviour can be analysed and predicted with TA.
HTF makes markets more volatile but that's not bad. More trading = more "quick" liquidity

Or smaller margins for hand job trading Or getting front run by bots targeting manual traders

You just have to adjust as an amateur trader and don't put your orders up for the bots to steal!!

[Moebius327]

Noobs ARE the ones, whose behaviour can be analysed and predicted with TA.
HTF makes markets more volatile but that's not bad. More trading = more "quick" liquidity

Several European countries have proposed curtailing or banning HFT due to concerns about volatility.

The effects of algorithmic and high-frequency trading are the subject of ongoing research. Regulators claim these practices contributed to volatility in the May 6, 2010 Flash Crash and find that risk controls are much less stringent for faster trades.

http://en.wikipedia.org/wiki/High-frequency_trading

[bitjoint]

I can't find the "Hodl!!!" option in the poll 

[johncitizen]

Forget what you think you know.

The worlds HFT expert,

Eric Scott Hunsader
Twitter: @nanexllc

Go to nanex.net

[BCB]

More important, this announcement means that real "professional" services, with experience in tradition FX/Trading are entering the market.

This is a good thing and indicates a maturation of the market.

[bitjoint]

More important, this announcement means that real "professional" services, with experience in tradition FX/Trading are entering the market.

This is a good thing and indicates a maturation of the market.

+1, but bitcoin doesn't have enough market depth for big players (yet). I'm curious about what will happen in the coming months: which major players will jump in, etc.. I concur these are 'generally speaking' good news but we still need to see the real impact. A single "big WS guy" could crash the whole market easily since a market with this depth is like a toy for them...

*Popcorn*

[SeaofBTC]

Long term, HFT will be a good addition to bitcoin because it means more people will be holding it at any given time. Even if they do not intend to hold it, traders represent occupiers of bitcoin.

Short term, HFT is fairly well known to cause more volatility. For traders, this is a good thing. I look at this with excitement. For investors, this is not as good looking, but I would argue that it does not affect them as a good investor is not focused on short term fluctuations in price anyway.

There are only a few trusted/large exchanges where HFT is possible, and some of them are not willing to open for discussion. Bitstamp has a stringent 600 API calls per 10 minutes policy, and they sent me to their legal department when I was asking about that since I run a fund.

As for HFTing and TA, I saw someone say that HFTing will make TA easier to use with bitcoin. I highly doubt this will be the case. HFTers typically eat TA users for profit.

[runam0k]

Agree with the general sentiment here.

On the one hand, it's another pro service coming to Bitcoin.

On the other, HFT is purely extractive and serves almost no purpose.

Check this out, a video showing one half-second of trading in one stock (Johnson & Johnson) - it's insane:

http://www.huffingtonpost.com/2013/05/09/video-half-second-high-frequency-trading_n_3245999.html

[bitcasino]

High Frequency losses and gains.

[bitjoint]

Check this out, a video showing one half-second of trading in one stock (Johnson & Johnson) - it's insane:

http://www.huffingtonpost.com/2013/05/09/video-half-second-high-frequency-trading_n_3245999.html

17k orders per second... not bad. Almost like me in bitstamp's site.. http://www.youtube.com/watch?v=cW7ZfCZRER8

 

[LeChatNoir]

HTF makes markets more volatile but that's not bad. More trading = more "quick" liquidity

This is absolutely wrong, the opposit is true.

[jonald_fyookball]

HTF makes markets more volatile

No it doesn't.  It changes almost nothing as far as price action
because all HFT is, is computers running algos trying to scalp fractions of a penny.

Anyway, market isn't liquid or deep enough to be at all practical for HFT bitcoin at this time.

[Luno]

There was some rumour early last year here that some British Asic HFT hardware manufacturer was hiring programmers knowing about bitcoin. 

[bananas]

It is only for american residents, if you are not don't even bother. I actually felt scammed for my personal data when signing up for atlasats.com and i'm requiring them to delete my data.

Without any previous notice of the above stated they ask for your full name, address(anywhere in the world) and e-mail for a step 1 verification which allows only one thousand dollars deposit or withdrawal.( Which is the same as not being allowed to trade ).

Then when you try to do step 2 and 3 that allows up to 150k you see in practice that it is only for americans.

[Swordsoffreedom]

This irritates me although if you look at the charts I think someone beat them to it already the spreads are very jagged and square shapes
Characteristic of an HFT bot

[jonald_fyookball]

This irritates me although if you look at the charts I think someone beat them to it already the spreads are very jagged and square shapes
Characteristic of an HFT bot

I just got done explaining why "HFT" barely effects price.  What chart are you talking about anyway?