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Algorithmic trading has two meanings: - the process of taking in inputs such as market data, current news, and producing orders without human intervention. - the process of optimising the trading of a large order or the market making process.

3 votes

What strategy would benefit most from having the fastest connection to the exchange?

You're specifically interested in latency arbitrage (see, for instance, this old WSJ article). This strategy is strictly about being faster than everyone else. You can imagine any number of instan …
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2 votes

Does HFT make sense in a pro-rata market?

Yes. You're right that queue position is less important in a pure pro-rata market. But in a market that is very deep, such as Eurodollars, the cost of getting adversely selected ("catching a falling …
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13 votes
Accepted

How are risk management practices applied to ML/AI-based automated trading systems

The risks involved in trading is everywhere and always a multifaceted thing: it includes the volatility of the selected asset, the leverage and concentration of the porfolio, whether there is a stop l …
Shane's user avatar
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