High-Frequency Trading (HFT)
Machines trading in microseconds: retail never races them, only routes around them.
HFT is machine trading in microseconds from co-located servers. Retail cannot outrun it, so it wins by holding timeframes where speed stops mattering.
High-frequency trading uses co-located servers and algorithms to exploit microsecond price differences thousands of times daily. HFT firms supply much visible liquidity while skimming fractions per trade. Retail cannot compete on speed, so it competes on timeframe: holding minutes to months where microseconds stop mattering.
How It Works
- Co-location cuts latency to microseconds
- Strategies harvest tiny edges at massive volume
- Provides liquidity that vanishes in stress
Trading Tips
Never scalp timeframes where HFT dominates the book
Expect liquidity to disappear exactly when needed most
Trade daily charts where machines matter least
High-Frequency Trading (HFT) Example
Say a news spike prints and your platform freezes for three seconds while prices jump 30 pips. HFT desks repriced in milliseconds and pulled quotes; retail platforms showed stale prices then filled the backlog badly. Speed hierarchy, demonstrated live.
How Traders Use High-Frequency Trading (HFT)
Avoid the microsecond game entirely: wider stops, longer holds, limit orders. HFT noise is a tax on impatience that patience legally avoids.
Related Terms
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