Why High-Frequency-Trading is NOT evil
In the alternative community I always did not understand why people were so against High-Frequency-Trading...
High-Frequency-Trading (HFT) is done in nanoseconds according to proprietary algorithms which Investment Banks use in order to find trends and capitalize on them. Some of them in order to have quicker access to passing on their instructions are optimizing the meters their computers are away from the stock exchange...
So some people do not like this and want to prohibit HFT entirely, forgetting the fact that these trade bots (which are making the majority of transactions each day, some rumor up to 90% of trading. So if you stop them, there goes the liquidity... and more liquidity means less spread and cheaper trading for the average Joe as well.
If average Joe thinks that the current price is lower than what the company is worth and is fine with the dividends, than what on earth does he care if some trading bots sell it to the ground? This is an extra bargain from him, as dividends usually are not affected by HFT. (Only if it is a bank and causes a bank-run or something like that).
Example in Bitcoin in Chinese exchanges: A while ago all the trading on Chinese exchanges was for free, so there were many bots trying to use even the smallest differences between exchanges in order to make a dollar. As the transactions were for free even the tiniest profit counted. Spreads were super low as well. After introducing fees the liquidity dropped like 90%, now only transactions which were profitable enough to also account for fees were done by those bots.
The small guy now has to suffer a bit more...
Regarding strategic Gold/Silver suppression and artificially high stock prices? I would say ignore the stock market simply and buy undervalued assets... These might be Gold and Silver, although they shine in case of a permanent power/internet blackout... and I am not sure if this will happen either..
Disclaimer: this is no investment advice, just my opinion
I agree with you Mexbit. Gold and Silver should be the asset people should be investing in. Unfortunately, MSM would advised against it claiming it an old relic. I have never been a fan of High-Frequency-Trading, but then again, most of the trading nowadays are done with ALGO, which in my opinion, creates distortion within the market. There isn't any price discovery mechanism anymore, the free market isn't exactly free.
I think there is no free market anymore... just a market waiting to collapse. :)
Yeah...at least we are "awaken" to the idea of a collapse. I can't say the same for the sheep.
HFT has destroyed the Free market. The financial Markets are in Turmoil. The true price of a company is Distorted. Come on a P/E Ratio of 200!!! on some Companys. If they taxed each HFT Trade this none sense would stop. If I knew how to Down vote you I would.
I upvoted you anyways! ;)
What do you care about a P/E ratio of 200 or non existing (when the company looses money instead of earning it)...
Just don't buy that shit and stand your ground and invest according to your convictions...
I don't like Apple, I do not like its P/E, I do not buy it... Thats it... And they can do a trillion trades around that stock and make the company worth trillions. I do not care...
If they manipulate it on the down side and I can buy Apple for a market-cap of a 100 million I would change my mind perhaps...
So what harm does it do?
It completely Distorts the Markets. This has a Massive effect on Investment Strategy for Everyone from Pensions to Investment Houses. You can not invest according to the Tried and Tested ways of Analysis.
Profit/Loss, order book, outlook. You can not invest, WISELY, Betting on a Bloody Robot
I think you would live much more calmly if you assume that all the numbers you get shown in your retirement account are fraudulent and that you will receive nothing... better have children... if you love them, they give you a guarenteed ROI!
My Girls are 28 and 26 years old. I am retired and receive a good pension.
Your ability to jump to conclusions, does not help your case. I think you would do well to research before posting, it will help.
Gazza.
My opinion is based on research... if not I would not have such a strong opinion...
Ok, I guessed you where the typical age of a Steem user.... a user in his thirties. For him these numbers are just crap... If you are in your 60's then you belong to the last fortunate group of beneficiaries of the current system. Enjoy it while it lasts... This can come to an end sooner than you think... perhaps this autumn?
And this opinion is based on maths and economics...
Thanks to market manipulation your pension funds are still able to pay out every month... Without intervention from the FED it would have been Game over a decade ago...
Anyhow... HFT is another issue than market manipulation...
We both are against market manipulation. But in your case I would favor it... if not your pension would be gone a decade ago... but for a guy who is supposed to get his pension in 30-40 years? I would tell him that he should look elsewhere for security than this system...
I think you have learned a little from me in our Exchanges. However you are apt to form conclusions on things which you no nothing about. I am 56 yrs old and I have an Ill health Pension.
I cashed this in at 55Yrs. $200k. I then bought hard Assets Gold, Silver and Crypto. Yes I bought 350 Ethereum for $10 each.
Now moving on. I totally agree that you should become your own Central Banker, governments are Bankrupt. A reset is at hand.
Do not form an opinion based upon supposition, then form a conclusion on that dodgy supposition. Then you will be fine.
Keep up your research and think out of the box.
Good Luck my friend.
Gazza.
Yeah! Good luck to you too, bro! :)
By the way, an ill health pension is not a capitalized investment, this is a risk insurance. A thirty year old could pay 5 USD a month for a 100.000 USD insurance or something like that... this is another case than funded pension investments.... But ok... if the insurance companies go under than I guess in any case you do not get any money...
And you are right that one should not generalize and jumpt to conclusions... but here in these chats one does not ask about all those personal details... so one assumes stuff about other persons without asking... rightly or wrongly...
I hope your condition is not seriously affecting you and you can enjoy at least the pension...
Hai @mexbit
Welcome the worlds best community !!!!
From now on you are on the green path to implement your kindness to everyone, hope you include the lucky people here.
Do not hesitate to share interesting and useful things. Good luck!!!
Greetings from me ** @abdelilahelkati **
Thank you so much, I feel honored... although I do not know the community... I will do what I can to bring the community more articles in this realm. :)
Your opinion is very interesting and reflechir!
Rip Free market!
a hole in the system, need to be filled
I agree with your opinion. It's very interesting!
Congratulations!
these are some interesting thoughts.
I will always support the free market.