GBP???

mlawson71 posted:
Does anyone know why this actually happened?

Try some of these videos by Nanex - it explains visually with live data streams what HFT do and how they operate. Once you see the frightening speed at which these machine trade, it is easy to imagine how a small error in the code of an algo can cause something like a flash crash...

NANEX HFT Trading Model:


Wild High Frequency Trading Algo Destroys eMini Futures:



Keep in mind these videos are from the US stock markets. Forex markets work a little different, but basically your order goes from your PC to your Broker, which either fills your order or sends it to other market makers/exchanges to get filled, and this is usually where an HFT machine sits. Most, and I mean MOST of all your trades are filled by an HFT machine somewhere.

It's shocking that a small error could cause such a big spike. This particular one probably cleaned out a lot of traders. Can someone be held responsible for it?

mlawson71 posted:
It's shocking that a small error could cause such a big spike. This particular one probably cleaned out a lot of traders. Can someone be held responsible for it?

I think its extremely difficult in the Forex Markets to determine exactly who or what is responsible. In the GBP case I read an article by an HFT operator that the algo's they develop today are so sophisticated that they can 'sniff out' Stop Orders and trigger them to initiate a larger move.

So if you think about it, after Brexit the market was heavily short the GBP. So many larger traders and institutions had Sell-Stop orders below certain key Historical Levels (going back to 1985 or even further). So all these algo's have to do is send thousands of buy/sell orders and immediately canceling them (usually within milliseconds). In the GBP this triggered large Sell-Stop orders, that in turn triggered more Sell-Stop orders, etc. Suddenly everybody scrambles to cover their buy orders and all you need is a few HFT operators to get nervous and switch their machines off in panic so their algo's don't bankrupt them in seconds. And then you get an instant evaporation of liquidity (willing buyers to balance the extreme volume of sell orders) and the market collapses and snowballs out of control. The only time the move stops is when the HFT machines are switched back on to fill all the sell orders.

I actually saw this process happen last night when markets opened on the EURUSD. For about 10 minutes the Bid/Ask spread went berserk, almost like the EURUSD was having an epilepsy attack. This was either a HFT algo test or an algo that was testing or hunting for stop orders. Whats more scary is that this happens all day long, and all you need is an algo that goes mental during low liquidity periods and you have a mini flash crash.

Black Swan events like this are awesome!

Even though I keep losing money, I am glad to see scam vendors go outta business too. Sh*t systems deserve to disappear. After all their hype, the vendors prove their own systems don't work well. Glad to finally get my own on them for once. 😎

mlawson71 posted:
It's shocking that a small error could cause such a big spike. This particular one probably cleaned out a lot of traders. Can someone be held responsible for it?

No, it's an unregulated market. There is talk that they may call for the exclusion of exotic options trading on the fx markets to create more stability, firstly because they are known to cause irregularities and it will limit the effect of Algo's.

JacoAF posted:

mlawson71 posted:
It's shocking that a small error could cause such a big spike. This particular one probably cleaned out a lot of traders. Can someone be held responsible for it?

I think its extremely difficult in the Forex Markets to determine exactly who or what is responsible. In the GBP case I read an article by an HFT operator that the algo's they develop today are so sophisticated that they can 'sniff out' Stop Orders and trigger them to initiate a larger move.

So if you think about it, after Brexit the market was heavily short the GBP. So many larger traders and institutions had Sell-Stop orders below certain key Historical Levels (going back to 1985 or even further). So all these algo's have to do is send thousands of buy/sell orders and immediately canceling them (usually within milliseconds). In the GBP this triggered large Sell-Stop orders, that in turn triggered more Sell-Stop orders, etc. Suddenly everybody scrambles to cover their buy orders and all you need is a few HFT operators to get nervous and switch their machines off in panic so their algo's don't bankrupt them in seconds. And then you get an instant evaporation of liquidity (willing buyers to balance the extreme volume of sell orders) and the market collapses and snowballs out of control. The only time the move stops is when the HFT machines are switched back on to fill all the sell orders.

I actually saw this process happen last night when markets opened on the EURUSD. For about 10 minutes the Bid/Ask spread went berserk, almost like the EURUSD was having an epilepsy attack. This was either a HFT algo test or an algo that was testing or hunting for stop orders. Whats more scary is that this happens all day long, and all you need is an algo that goes mental during low liquidity periods and you have a mini flash crash.

Its not difficult to find out what started the chain reaction if it went through an exchange,4.6trillion through one exchange daily,different with dark pool,but the general public will never be informed,sometimes the HFTs push around the price just to see what reaction it gets,called pinging,a high-frequency trading firm places bids and offers in small lots (like 100 shares) for a large number of listed stocks; if an order for stock XYZ gets executed (i.e., someone buys it in the dark pool), this alerts the high-frequency trading firm to the presence of a potentially large institutional order for stock XYZ. The high-frequency trading firm would then scoop up all available shares of XYZ in the market, hoping to sell them back to the institution that is a buyer of these shares

     

GJscalper posted:

snapdragon1970 posted:
I was drinking whiskey celebrating at the time, my gfs 10k profit on oil.

Why would you bother typing it if you have no proof of it?

screen shot you requested:

mrtodd posted:
What just happened?
News?

Not only GBP based pairs but also all of trading pairs move here according to the fundamental statement or technical points of market! I see GBP related trading pairs are too much volatile, particularly GBP/JPY! This is one of the most volatile trading pair, and I like to use scalping trading style mainly here!

GJ can be amazing when you trade get the direction right because it can run and run. But sometimes it is such a pig and spikes all over the place. I find the spreads to high for scalping

GBPJPY trending pretty nicely right now...let the good times roll

mrtodd posted:
What just happened?
News?

News trading is always interesting! I do news trading mainly, in addition I use almost all of trading instruments during high voltage news sessions! Yes, GBP based trading instruments are much volatile, especially GBP/JPY!

GBP is very good for news. GBP/JPY moves more but I prefer GBPUSD as it is i more predicatable and spreads are lower