Trade programs earn billions – small investors are the stupid

The war between man and machine is in full swing on the exchanges. But in the fight are drawn unequally opponents. The small ones are attracted here, while automatic trading programs earn billions.

The computing machines have long since taken over the power in the financial markets. because 24option scam it Your strongest weapon is the speed. In fractional fractions, they can analyze large amounts of data, react the go to my blog to the smallest price excursions and open and close thousands of positions. High-frequency traders are currently trading half of the total trading volume on the exchanges.

Classic investors and small investors are disapproving of high-frequency trading and do not trust it. Finally, they get off by such computer programs. You have no chance. But the minds are not only heated by the speed aspect: In the meantime, trading programs can use sophisticated tactics to take advantage of other traders. For example, they can create a whole new picture of supply and demand with the purchase and sales requests, expressed in milliseconds, which misleads the other you anyoption scam just market participants.

This is how high-frequency traders

There are a variety of controversial strategies that are often applied by high-frequency drivers. We clarify:

With such tactics and an enormous transactional density, high-frequency traders achieve small profits. If they are added together, they will generate considerable income.

The other market participants are the sufferers, even if they are mostly unaware out Copy Trading go that they could have had a better course without the high-frequency trader. Exceeding one year, however, the damage goes into billions.

In the current study of the then etoro review them CFA Institute, The following situations:

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  • While stable market conditions, high-frequency traders are shifting their trading activities to dark pools before switching to open trading places or until prices rise again. Many investors with limited orders in open trading are then on the wrong side.
  • High-frequency traders duplicate numerous limited positions. This increases the probability that a position will be executed. Because of the speed advantage, the superfluous positions can be deleted before the their Plus500 scam a execution takes place.

CFA analyst Dr. Svi Rosov analyzed the data from 150 shares from the UK, France and the USA between 2010 and 2014 and observed the respective offer data. He found evidence that investors no IQ Option scam take could be conquered by high-frequency traders. In the US, Rosov was able to clearly identify this phenomenon, as the share of over-the-counter trading at stable market conditions was almost twice as high as in unstable phases.

The war between investors and machines will continue to dominate the stock exchange world. But it is too early for a panic. Experts assume that would Social Trading go private investors will only suffer a measurable loss through high-frequency trading if long-term, systematic price distortions occur. However, this is in contradiction with the basic idea of ​​high-speed trade, which only takes advantage of minimal price differences. Until now, no systematic price distortions have been identified or proven.

Image: Pixabay

 

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