Last Updated on June 19, 2022 by Quantified Trading
These days computer and algo trading do most of the volume in the US. Stocks move very fast and at a very thin volume. This creates some nasty challenges for the individual daytrader. Either you have to compete on the same terms as them (or trade with them), or you have to do something different.
The algo trading is performed mostly by big institutions and with a lot of resources, both human and financially. To compete directly with them I will certainly lose. However, the possibility to trade with them should be a viable option. This is easier said than done. You need trading programs that can take you in and out of positions automatically. There is no way you can trade often and quickly enough by doing it manually.
Personally, I know very little programming. I cannot even make simple programs in Excel writing VB. Therefore I have decided to go another route, namely developing strategies which I believe should have the least impact from algo traders. For example: holding ETFs or stocks from open to close. These criteria might be based on yesterday’s performance, if it is news in the stock, where it opens relative to other stocks etc. There are a lot of opportunities. Later I will give some examples of this.