Quote from: Lorence.xD on March 11, 2021, 05:00:00 AM

I am not that active on this discussion but sometimes I do lurk. And I think that this post is going to be relevant to the future of trading in general. I was watching a Youtube video about High Frequency Trading and I think that it will be the future of trading because the program can do trading faster than any human being. There is more in depth in the video but I will try my best to summarize HFT, consider that the stock price is around 10 USD and you ordered at that price but the prices dropped to 9 USD and HFT swoops in and buys at that price and then when your order arrives at 10 USD they are going to sell it to you with the profit of 1 USD. I am using stock as an example because the documentary that I watched was mostly focused on that. My question is, will HFT be feasible in the cryptocurrency market? Will it face any problem?

Link to the documentary: The Wild World of High Frequency Stock Trading (Documentary)

HFT has been present since the beginning of trading on exchanges.

Quote from: LeGaulois on March 11, 2021, 05:30:27 PM

Will it be used on the cryptocurrency market?

Surely, but the resources needed are not given to everyone. Mainly banks, hedge funds, etc are using it. In the US, they even use what we use to call the "dark fiber" to get a super-high-speed internet connection. Oh, I should mention, the infrastructures for this fiber are paid with citizens' taxes. It's like if, during a war, you pay the tanks for your enemies.

It also needs very developed algorithms and I'm not exaggerating telling you some worth more than a million-dollar
When these entities will enter the market, it is more than likely that they will use the same methods in their race for profits.

Will it face any problem?

I don't see why. If this is not a problem in traditional finance there is no reason it should be any different in the crypto market.
Except for the problem that we could ask ourselves some ethical questions. Namely that as in finance it disadvantages people who do not have the resources I was talking about previously. We will not be on an equal level.

But since people don't seem to care, I don't see why they would start when HTF will be used with the crypto market.
Perhaps it's already in use without we notice it.

HFT is a fairly broad concept, from slow intraday trading (1-10 trades in the day) with closing positions at night(if the market closes) and the so-called UHFT with hundreds of orders per second and dozens of trades.

The requirements for infrastructure and specialists are also very different, from a couple of thousand dollars spent on programming your scalping strategy and connectors to the API of exchanges, to hundreds of millions if you want to compete with Jim Simons funds.