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Trade ETFs and very high liquid stocks to sidestep HFTs?
Recently, I find I've forced out of positions from price manipulations via HFTs intraday. Or, been entering positions I thought were good long setups when it was relaly HFTs battling it out. I am wondering, has anyone tried to sidestep them by trading stocks that have very high volume intraday or ETFs? (eg. CSCO, FB, BABA, etc.)
Cheers
Can you help answer these questions from other members on NexusFi?
Sure, at certain times with low volume stocks, I'll see a bid at 40c. I may put a bid at 41 (even with 10 shares sometimes), and then the bid goes to 42, then I go to 43, and it goes to 44, and so on. I did this to see if there was really an algorithm at play and I didn't have to risk that much money. Eventually, it got to 75c before I was filled. This was just an experiment and I risked $2 to see how price behaved.
But it's not refusal to get filled that's annoying. Many times I'll backtest certain setups, and they work out reasonably well. Then when I trade these setups live (with lower volume stocks), I put an limit buy order in and get filled. The stock trades immediately lower, lower, and lower, until finally I hit out. 5-30min later the stocks is 1-2 points higher than when I bought it. I look at the volume, it doesn't show any significant buying whatsoever. In some cases, there's practically 0 volume from where I bought and hit out. This seems to be a reoccurring theme especially with the lower volume stocks.
For example, with CSCO, I find it behaves much better. The bids are real, and they don't tend to lift on and off within a microseconds. And by low volume, I mean it trades less than 60k shares per 5min
HFT stands for High Frequency Trading. Usually a computerized trading algorithm. So lets use a tiny bit of logic.
If a stock was being manipulated by HFT would it have low volume?
My personal view is if you are a technical trader you should not trade low volume stocks.
I assume you really mean "and" and not "but" in your last sentence. Nothing you wrote before that would contradict what I wrote. I simply pointed out that if a stock was being traded "frequently" it would not have low volume.