How to achieve risk control in high frequency trading?

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The concept of risk control in high-frequency trading is to stop loss and take profit.

There is a ** diagnosis function in the "shareholder voting network", which effectively analyzes the ** and ** pressure support level and news analysis, and everything is free.

High-frequency trading refers to the use of computer technology for fast trading methods, this trading method can obtain profits in a very short period of time, but it is also easy to cause market risks and unfair competition. Therefore, it is very important to effectively monitor high-frequency trading strategies. Here are a few ways to achieve effective oversight of high-frequency trading strategies:

Establish regulatory regimes and rules. The regulatory authorities need to formulate corresponding regulatory systems and rules according to market conditions and technical characteristics, clarify the trading methods and restrictions of high-frequency trading strategies, and ensure fair competition in the market.

Strengthen information disclosure and transparency. Regulators need to strengthen the collection and analysis of market information, disclose market information and transaction data in a timely manner, ensure the openness and transparency of information, and prevent high-frequency traders from taking advantage of information asymmetry to obtain profits.

Strengthen technical supervision and risk control. Regulators need to establish an effective technical regulatory mechanism to prevent high-frequency trading strategies from posing risks to the market. At the same time, it is also necessary to strengthen risk control and monitoring, formulate risk early warning and emergency response plans, and ensure market stability.

Establish a reasonable transaction fee and tax policy. High-frequency trading strategies have a certain impact on market transaction costs and tax contributions, and regulators need to formulate reasonable transaction fees and tax policies to ensure the healthy development of the market.

"High frequency trading" (high frequency trading) is one of the words that have appeared frequently in the United States financial ** recently: this kind of trading dominated by powerful computer systems and complex calculations can automatically complete a large number of buying, selling and canceling orders within milliseconds; And in order to gain this thousandth of a second advantage, ** companies even place servers near exchanges or in the same building.

Therefore, some people in the industry believe that this increasingly mysterious money game puts ordinary investors without technical support in a passive state, and the computer system of high-frequency trading, once it fails, it will bring a huge impact to ** in a short period of time.

Business Insider, a well-known business news journal, published an article on September 27, 2012, inviting Garrett Nenner, a trader who has been critical of high-frequency trading, to explain the problem in plain language.

Naina Analogy: Let's say you want to spend $5 on a gallon of milk at the supermarket, but by the time you walk to the checkout counter, it's already in dollars, and you can only buy three-quarters of a gallon. In this case, the high-frequency trading company is the other customer who is extremely fast and can speculate on your purchase behavior.

But if there are too many such customers, it may be difficult for the supermarket to maintain normal order.

In addition to the huge losses of Knight Capital and the "flash crash" of the BATS exchange in early 2012, the source even told the US Congress that the minor accidents that occurred on ** happen almost every day.

Business Insider reported that from August 2011 to September 27, 2012, Nanex, the developer of the trading database, recorded more than 2,000 abnormal fluctuations.

Some reports on Wall Street in 2012 also pointed out that a number of insider whistleblowers said that exchanges often provide "special care" to ** companies that adopt high-frequency trading; Not long ago, the US Commission of the United States (SEC) fined NYSEEURONEXT $5 million for its faster ability to provide information to certain institutional clients.