High-frequency trading is executed by powerful computers using complex algorithms to buy or sell financial instruments based on comprehensive research. Speed plays the key-role here, and a firm can gain huge benefit if it is faster than its competitors even for a millisecond.
This type business is carried out by the hedge funds and investment banks based on the automation of the platforms, and in the market, there are many high-frequency trading firms which are dedicated to crafting on high-frequency trades.
How to make money using high-frequency trading?
Algorithms help to find new Forex trends automatically before any competitor catch that. The computer places a greater amount of trades in different markets so that it can increase the profit based on per transaction. Combination of speed and size plays the main game and make money here, and for this reason, the implementation of a better technology can increase the profit rate significantly. But high-speed organizations are often viewed as the rogue players by the competitors as it gains the success by any cost. To become a professional high freuqncy trader, you need to use a high end platform. Check this here and know the features of Saxo. Soon you will be taking the trades with low risk and manage to earn money.
High-frequency trading is a very considered very controversial model as it triumphs over the human decision. With the automated system, it can take a huge risk sometimes, and a flawed algorithm can end up resulting millions of dollars losses in a few seconds.
Regulators’ view about this method
The Financial Conduct Authority has a greater concern regarding high-frequency trades because they believe it can work as a deadly enemy for small investors. There can huge risk sometimes which software can be unable to detect.
For instance, fundamental analysis is not possible with this method because it takes an important decision based on technical analysis, but fundamental components can affect the technical measurement, which should not be overlooked. The UK financial regulators have already asserted that if any abuse can be detected, then immediate legal action will be taken.
Amount of money that can be made
High-frequency Forex traders in Singapore can make decent profit but it requires precise skill and quality trade executions. High-frequency trading can be good for those who come to the business with a huge investment, but it can be taken as a threat by the retail traders.
Is high-frequency trading legal
High-frequency trading analyzes currency pairs based on powerful computers and very controversial topic among the common masses. Few of the businessmen believe that it an unethical practice and work for the giant investors by providing them with the hidden facilities. But the benefactors of this method believe that they are using cutting-edge technology for the betterment of their business success to ensure the high profit.
HFT works very well to increase the market gain by 10% and takes the facility of rapid growth. Most of the high-frequency firms work as the market leaders and provides liquidity with lower volatility which helps to narrow down the bid-offer spreads and help to make trading cheaper for the other traders.
This is a quantitative process where important decisions are made by the use of artificial intelligence. The success of HFT mainly depends on the analysis of the large volume of information which is impossible for a human to perform. The types of high-frequency trading include latency arbitrage, statistical arbitrage, event arbitrage etc.
High-frequency trade can generate a million dollars of profit within a short period of time. Studies show that the amount of HFT is half among the total accounts in the Forex market. Using high frequency, a huge amount of money making is possible because this method tries to profit from the institutional trades price movement and tends to reduce the fluctuations of the price.