High Frequency Trading: What Works?

High frequency trading can be a big problem for traders. They trade too much under the assumption that the more they trade the more successful they will be. That is not always the case. It won't make them more money; in most cases it will do the opposite. You'll become stressed and frustrated, taking trades that are just wrong in order to try to make up for the losses, and putting yourself into more difficulties.

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High Frequency Trading Will You Lose Money

high frequency tradingIt's a fact - high-frequency trading will make you lose money. The more you trade, the less likely you are to pay attention to your chart, and in the end you might be trading without thinking at all. It's no wonder that so much money is lost by so many. And the more money is lost, the more we trade, hoping that it will all turn around. Your trading has turned into gambling, and the only way to stop the decline is to step away altogether and stop high-frequency trading.

Work On Quality Not Quantity

The amount of trades you make is far less important than the quality of the trades you make. High frequency trading might manage to catch a few good trades, but the majority are going to be useless. They'll go against everything you learned, and against what your charts say, and you'll end up with a big loss and a lot of disappointment. You might even lose your confidence when it comes to trading in general, and you'll therefore step away from it all even though, if you simply stuck to your charts and your trading edge, you could do well and be extremely successful.

You'll Have More Money

high frequency tradingWith high frequency trading, you'll only be able to spend a small amount on each trade. (Or you run the risk of losing all your money). When you trade at a lower frequency, you'll have more to spend on each trade. This more measured approach will increase your return. This you will achieve by using more capital and spending the necessary research time. You can see how high frequency trading doesn't make any sense if you're trying to make money and be successful in trading.

High Frequency Trading Still Happens

Despite knowing all of this, and despite it all making a lot of sense, there are still people who practice high frequency trading. Why is this? There are many reasons, but the main one is too much confidence. When a trader has a win, or perhaps a number of wins in a row, they feel invincible. This feeling of winning is a great one, so they want to replicate it. They begin to take chances, trading too much, and eventually losing everything they gained.

At that point, they become worried, even desperate, and high frequency trading begins again because they want to make that money back that they lost. More crazy trades are chosen, and winners are few and far between.


The best advice we can give is to take it slowly when it comes to trading. It should be a calm, measured process, and if the trade doesn't work for you, leave it alone. Stick to what you know and you'll be much more successful.

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