Читать книгу Currency Trading For Dummies - Kathleen Brooks - Страница 65

High-frequency trading (HFT) is a type of algorithmic or black-box trading that has grown in significance in the last 20 years. It’s a rapid way to trade currencies and other asset classes. High-frequency traders move in and out of short-term positions in seconds or even fractions of seconds, sometimes aiming to capture a fraction of a cent of profit on every trade.

HFT has exploded onto the scene and has grown rapidly since 2000. However, it isn’t without its critics. Some people believe that HFT causes excessive market volatility — it was found to contribute to the 2010 “flash crash.”

Today HFT is mostly centered in the institutional and hedge-fund space. Most retail brokers don’t offer HFT and actively stop clients from using it for a couple of reasons:

 Cost: HFT execution happens in just a fraction of a second, so it requires top-notch internet connections and hardware, which retail traders may not have. Any latency in your trading (for example, if there is a delay between placing your trade and execution because of a slow internet connection) could leave you exposed to losses.

 Regulation: On balance, reputable retail brokers apply high standards to how they trade, and the reputational issues that currently surround HFT have thus far been a turnoff.