Monday 7 March 2016

Why Algos Work!

One of the reasons that algos for hybrid trading work so well is that it makes me focus on what's important and to ignore what's not.

Recent studies, talked about here, show that if you know what to ignore you can focus on what's important. The article is well worth a read.

Applying that to trading means that I create a trading plan and then strengthen my ability to stick to that plan by having an algo do the triggering based on the rules in my trading plan but only after I arm it for each specific trade after I have determined that the extra context components of the TP are present.

This means I have plenty of time before the trade triggers to arm my algo and then let it shoot the order with just 1 ms of latency when all the rules are met.

As the Great One said, "how sweet it is".

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