As the age of internet dawn on us, we would expect the financial markets to become more transparent, more efficient, and provide a level playing field for all investors/traders.
However, actual reality is the opposite: markets are not much more transparent than they used to be, and increasingly, we are being pitted against computers, or more specifically: High-Frequency Traders!
High-frequency traders use the internet to carry out high-frequency trading: using a complex algorithm to search the whole financial markets and trade a large number of securities in matters of seconds.
High-frequency trading is usually employed by large institutions and funds, and they pose as an unfair advantage against small investors because most trading opportunities that you find, the computer might make a move ahead of you and pocket that gain for its trader.
Despite the odds being stacked against small investors, there is still room for investors/traders to …Read the full article →