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This assumes a single party has overwhelming consistent influence over both big and small traders. Highly unlikely. There’s no market maker in futures, but there are for e-mini options and interest rate futures. The exchange isn’t handing out your order flow to 3rd party firms for it to be traded against. Your brokers aren’t trading against you or probably aren’t reselling your order flow.
Trade your algo or mechanical system on SIM with 1 lot only with a sample size of 10; 1 sample per day. Then follow the same on LIVE. Repeat 10 times. If your results are within 90% (10% accounting for noise), then that’s your evidence that this conspiracy is all in your head.
For some reason, when I execute my trades with specific stops, sometimes the market tends to 'move' towards my stop to get it filled BEFORE going into my intended direction, which seems to make unusual moves in this process along the way.
Somehow, it seems they want to fill your stop loss first, only to resume going in your intended directions. Pretty annoying if they can track everything in real-time, with millions of other little 'mice' like us getting sliced.
Then of course the question arises - do our edges work as intended? My take on this is this - yes they do work, but because of this problem (?) and randomness, we have losing trades, eventually.
I agree they may not be targeting you as a individual trader however they are targeting retail traders as a whole. This is a large enough group to make a difference. It is fascinating how orders are routed through the market. HFT take advantage and manipulate order flow. Through ways I don't totally understand they are able to jump ahead of another order. Which means you/I could be one tick away from getting filled at our target and a HFT takes the buy/sell which would have fulfilled our target. It's an unfair game where money and speed have a clear advantage over the human retail trader.
Fun Fact: In the mid to late 1800's railroad stocks were the high-flying tech stocks of the modern era. At the height some of those stocks reached over a $100 a share. Fortunes were made and lost just like today. People were in some cases selling everything they had in order to buy these stocks in the chance of becoming rich. Eventually the bubble burst and by the turn of the century most of the railroads went bankrupt. Sound familiar?? Some historians consider this to be the first stock market bubble.
HFT front running and order flow sharing is for stock exchanges though, not futures, generally. And front running happens at a nanosecond level. People conflate front running with trades going against them, when in reality they are behaving like other market participants.
But logically, trades (regardless of retail, HFT, hedge funds, institutions, etc) can be analyzed anonymously and its aggregate are categorized in separate buckets. You have different trading regimes rise to significance and back to insignificance per second in a dynamic system.
You can’t hide your trade, and neither can “they.”
The reality is your stops are too tight and your edge isn’t as significant as you think, or you’re not following your trading plan consistently. The problem is most likely you 90% of the time.
Synthetic mkt makers hft are about 70% of the futures mkts.
Virtual citadel and many others
Stops are hunted because machines learn that most retail do the exact same things at nearly the same times.
All within set ranges of 3 to 6 es points. There are firms like citadel that do execute for customers and get them great avg prices. Stop hunting is about liquidity hunting. Every time you force a stop you create a trade opportunity in the opposite direction. If you cannot entice others to trade then you must force it.
This day and age of the internet I find it very lazy when people ask for information that can be found with a quick Google search or multiple ones. This is the age of information and finding what you need to satisfy your needs is at your fingertips as well as my own.
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I think @Arch's point was there are no designated market makers for ES, CL futures etc.
A google search for synthetic market maker references Automated Market Makers in Crypto. No mention of futures, or even equities.
And while it may be possible in stocks, where people do pay for order flow, things like that are not possible in futures.
As I said earlier, Bots, AI, HFT, whatever your term are just doing what specialists/locals did on the floors/pits, they just do it more efficiently and faster.
See the chart below. Actually, HFT is a large part of the futures market and is growing. As of 2020 nearly 50% of ES is HFT. Would assume its beyond 50% mark now. HFT started showing up in the futures market after the 2008 financial crash. There is a ton of papers out there beyond the one below of the history and the impact to the futures and equity markets. This report is from 2022 from the Commodities Group Trading commission.
Perhaps the most interesting quote from the report: