Training in High Frequency Trading at the CIT

Training in High Frequency Trading at the CIT

Trading haute fréquence, Formation trading, Trader, Quant, CIT

Improving the profitability of traders…

Techniques in High Frequency Trading are presented in the training and research programs at the CIT and are detailed by one of researchers in a recent publication. It is hard to imagine a trading school where its students wouldn’t study High Frequency Trading. Likewise the research center of the CIT concentrates its efforts on the creation of new High Frequency algorithms to improve their profitability. Researchers throughout the world come to participate in the CITRD’s program, which is supported by major financial organisms.

 

The CIT ensures that control authorities evaluate all of the programs created in its laboratories during testing phases. Any cheating with High Frequency Trading techniques (see below) does not correspond with the spirit of competition at the CIT; students at the CIT are instructed in different courses on the dangers of this form of cheating. As for the CITRD, it directs the development of High Frequency algorithms deprived of the possibility of manipulation and special programs destined to control the actions of traders in a framework of more responsible finance.

High Frequency Trading, a modern tendencyrecherche en trading Haute Fréquence au programme de formation trading du CIT USA

High Frequency Trading transactions and techniques have appeared only recently, but their rise and development were immediate. This new form of trading is based on the automatization of decision-making processes, which permits the acceleration of transaction processes in proportions that would have been unimaginable several years ago. The increase in the volume of stock information exchanged in real time has made it impossible for humans to analyze all data. The use of High Frequency Trading has become necessary in some stock exchanges, and techniques in HFT have yet to stop improving, and increasing in efficacy: from 20 ms in 2010, the delay of transaction treatment has reached less than 0.1 ms in 2011. This speed increase has made High Frequency Trading programs the essential ‘best friends’ of professional stockbrokers.

An algorithmic HFT program analyses the applicable order book, then scalps the book before reorganizing and classifying it. This leads to the heart of the system: swing trading (also known as ‘day trading’). Swing trading consists of analyzing the trends of a particular asset, by positioning oneself at the beginning of the rise and reselling just before the fall. This difficult technique is much more effective with a computer with a reaction time inferior to a human’s. Before High Frequency Trading, the process of  swing-trading could span entire days; now it has been cut down to mere minutes.

Nonetheless, High Frequency Trading is not entirely made of advantages: machines do not have reasoning skills and new risks have developed, notably as a result of bad algorithmic programming. But, above all, High Frequency Trading has occasionally lead to manipulation of order books, where traders use programs to their advantage in order to trap their competitors.

An example of a platform for High Frequency Trading is shown in the excerpt of a CNN report below :

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