Irene Aldridge
Irene Aldridge

FX sell-side perspectives on high frequency trading

Irene Aldridge discusses the mechanics, pros, cons and the implementation challenges of several key sell- side high-frequency strategies which can be applied to many securities, including FX.

First Published: e-Forex Magazine 37 / Algorithmic FX Trading / October, 2009

Attention has surrounded High-frequency trading ever since Goldman Sachs pressed charges against their former employee for allegedly walking away with their Golden Goose – a trading system capable of producing consistent profits by trading at high speeds. A public outcry ensued accusing Goldman and other high-frequency traders of unethical behaviour that disadvantages smaller brokerages unable to afford the sophisticated know-how and high-speed computers. Various proposals to slow down or even ban high-frequency trading played out in the court of public opinion. Misconceptions, fears and public outrage poured onto the institutions engaging in high-frequency trading. Misunderstandings about the nature of high-frequency trading strategies and sell-side strategies in particular are driving much of the public response, however emotional. Most sell-side high-frequency strategies go far beyond the naïve first-to-market approach. This article attempts to fill the information void by discussing the...continued

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