Easley, O'Hara, & López de Prado
09 April 2012
The Volume Clock: Insights into the High Frequency Paradigm
Over the last two centuries, technological advantages have allowed some traders to be faster than others. We argue that, contrary to popular perception, speed is not the defining characteristic that sets High Frequency Trading (HFT) apart. HFT is the natural evolution of a new trading paradigm that is characterized by strategic decisions made in a volume-clock metric. Even if the speed advantage disappears, HFT will evolve to continue exploiting Low Frequency Trading’s (LFT) structural weaknesses. However, LFT practitioners are not defenseless against HFT players, and we offer options that can help them survive and adapt to this new environment.
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1 Comment to "The Volume Clock: Insights into the High Frequency Paradigm":
georgeingram
28 April 2012
Although well argued, I sense a yearning for the recent past say 1953. Maybe the cure might be to invest and hold until death! while waiting, curl up with a good paper or hard bound book (while you can still get them), some comfort food, and watch what your missing on CNBC? NOT!
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