Evading Strategies for High-Frequency Traders
In the dynamic world of futures trading, a seasoned author offers some intriguing advice for traders seeking to navigate the complexities of High-Frequency Trading (HFT).
First and foremost, the author suggests finding patterns in daily price action caused by HFT and adapting strategies accordingly. Instead of fighting these patterns, the author advises going with the flow of the trend for that day, particularly after the first hour. This approach, the author argues, can help traders avoid the pitfalls of intra-day trading and reduce the risk of being caught in the whirlwind of HFT activity.
Another key recommendation is to switch from intra-day trading to taking signals at the start or end of the day. This shift in trading time frame, the author suggests, can help traders focus on longer-term trends and reduce the influence of HFT, which often operates on a much faster timescale.
To further counter HFT, the author recommends increasing the trading time frame from minute or hourly chart to daily chart. By doing so, traders can gain a broader perspective and make more informed decisions, minimising the impact of HFT on their trades.
Moreover, the author advises trading small enough to use end-of-day stops instead of intra-day stops. This strategy, the author explains, can help traders manage their risk more effectively and avoid being caught in sudden, HFT-induced price movements.
However, it's worth noting that there are no widely known professional traders or teams publicly identified for specifically adapting to HFT activities in futures trading and applying these strategies on the daily chart. Some trading platforms, in fact, prohibit HFT and scalping strategies altogether, focusing instead on sustainable, long-term approaches.
In conclusion, navigating the challenges posed by HFT in futures trading requires a shift in strategy. By finding patterns, adapting to trends, increasing time frames, trading smaller, and using end-of-day stops, traders can potentially reduce the impact of HFT and improve their chances of success. As with any trading strategy, however, it's crucial to do thorough research, understand the risks, and make informed decisions.
