It seems that doing HFT without being in a datacenter close to the exchanges is a loosing strategy, since at these frequencies, a delay of milliseconds can make a huge difference. Do you agree with this assessment?
100% absolutely - here is a really good TED talk that puts things in perspective (sorry if it's a repost, but it's definitely worth your time to watch) : http://www.youtube.com/watch?v=TDaFwnOiKVE
For just momo or momentum traders that deal in extremely liquid trading instruments, microseconds can even make a difference. Our current feed from a US equity exchange is about 220 microseconds or .22 miliseconds - and we are on the "slow" side of things. The guys that actually read, process, send transactions usually go as far as using FPGAs even (some of the bigger firms)
That said - there are still lots of places in the market where opportunities exist!
Thanks, I'll watch the talk with I get a spare moment.
Regarding the existing opportunities, It's interesting imagining a situation where opportunities did not exist, seemingly the market would either become completely random, and driven by luck, or remarkably stable. Most interestingly it crazy to imagine a market that has been optimized to complete stability. I wonder if that's the natural progression of things.
I think in a big rhythmic cycle, that may be true. I have friends that are fund managers that say, now, the market is completely and totally efficient, and that people making money are just "lucky" - both are interesting and somewhat valid! If 10,000 funds trade, there will be some profitable one (even though there were SO few in 2008). It's an interesting study, even if you aren't a trader
For just momo or momentum traders that deal in extremely liquid trading instruments, microseconds can even make a difference. Our current feed from a US equity exchange is about 220 microseconds or .22 miliseconds - and we are on the "slow" side of things. The guys that actually read, process, send transactions usually go as far as using FPGAs even (some of the bigger firms)
That said - there are still lots of places in the market where opportunities exist!