Would like to discuss everything but your trading lol. Want to talk about clearing, software, data feeds, data centers etc. But no psychological hang ups and personal issues either lol. Daum might not be anything worth discussing.....
Only thing that would be interesting to hear about is, if we have any traders using HFT algos. Would be cool to hear how much money you spend to minimize latency, and how much volume you do in a day.
Probably the best way to kickstart this off is to first talk about your own setup. And by describing what services and products you're currently using as a result of your own trial and error, it will encourage others to post their personal setups in the same format. And the more details you personally submit, the more you can expect to see posted from others.
If you want the best value for the money trading index futures, for the least amount of capital outlay, AMP Clearing is your best option. It is so simple, a caveman can do it. You get some trading software, you find a broker, and you start trading after depositing money with the broker. That is the mechanics of it. There is nothing else to discuss, because as day traders we are all self-directed. Capiche'?
That is true for us retail pikers/cavemen. But we want to hear from the HFT wizards on this board with co located servers etc. pulling in millions with sharpie ratios well above 3..
It can be a daunting task to acquire an edge in trading, and even more challenging to find one that works consistently for day trading. For the sake of this discussion, let's assume you've moved beyond just searching for a profitable and consistent edge. You might think that your journey is at an end, but you'd be mistaken—your problems have just begun. Trading to simply replace wages and supplement income, and then expanding into a full-time trader of size, is incredibly difficult. Many barriers prevent smaller traders from becoming large traders, and throwing money at the problem doesn't solve it either. Technology is constantly evolving, and the struggle to navigate through the maze has brought down many aspiring moguls, lol. It reminds me of a small construction company that my family had decades ago. With four relatives and one hired hand, we made a good living earning $20k a month. Then we grew, took on more work, and increased our crew to forty men—only to start losing $20k a month. The moral of the story: bigger isn't always better. The grass often looks greener on the other side of the fence, but scaling up can bring a whole new set of challenges. Setting Up a Colocation-Based Index Futures Trading Company: The Reality Transitioning from small-scale trading to setting up a full-fledged index futures trading firm is one of those challenges. The process is not only resource-intensive but also incredibly complex. Here’s what it entails: 1. Colocation Infrastructure Server Hosting and Latency Reduction: Using a colocation service means placing your trading servers in close proximity to the exchange's matching engine, drastically reducing latency. Colocation is essential for high-frequency traders (HFTs) and anyone looking for fast execution. Exchanges like CME, Nasdaq, and others offer colocation services, allowing traders to reduce the time it takes for orders to reach the market. Connectivity and Redundancy: These colocation facilities offer high-speed, low-latency network connections, with redundancy features to ensure continuity of trading operations during technical disruptions. Advanced data centers like Nasdaq’s Carteret facility provide 40G connections to ensure your trading platform operates at the fastest possible speeds. At this point I'm pretty sure you're thinking. I didn't want to go in business but to offset some of these cost it just might make sense to explore the following. 2. Regulatory Compliance Commodity Futures Trading Commission (CFTC): Operating a futures trading firm requires registration with the CFTC. This applies if you plan to manage funds, offer trading advisory services, or use discretionary accounts. CFTC regulations also require latency transparency and equal access to prevent exclusion of smaller traders from the market. National Futures Association (NFA) Membership: A futures trading company also needs to be a member of the NFA. Passing exams like Series 3 is mandatory for key personnel to legally engage in futures trading. This ensures compliance with the strict U.S. financial regulations governing futures. 3. Software Development and Testing Costs Custom Trading Platform: Developing a robust, low-latency trading system is both expensive and time-consuming. A custom platform, tailored for index futures trading, can cost hundreds of thousands of dollars. It typically takes between 6 to 12 months to develop and fine-tune, factoring in algorithm design, trade execution speed, and risk management features. Backtesting and Stress Testing: Rigorous backtesting is crucial to ensure the trading algorithms perform well under real-market conditions. This involves simulating trades based on historical data, which can be a costly and time-intensive process. 4. Capital Requirements and Operational Costs Initial Setup Costs: Beyond server and colocation fees, initial capital must be allocated for hardware, software licenses, connectivity, and disaster recovery solutions. Depending on the firm's scale, these expenses can easily climb into the hundreds of thousands or even millions. Scaling Challenges: Much like in the story above, scaling up a trading firm isn't just about adding more capital or personnel. Increasing the size of the operation adds complexity, requiring tighter compliance, higher technical expertise, and additional costs for risk management. 5. Ongoing Software and Licensing Costs Licenses and Third-Party Tools: You may also need third-party software to supplement your infrastructure, such as data feeds or risk management tools. Licensing these tools can cost anywhere from $50,000 to $500,000 annually, depending on their capabilities. The journey from individual or small-scale trading to a full-fledged trading firm, much like expanding a small construction business, is fraught with challenges. Scaling up adds complexity and costs that are not immediately apparent. Whether it's managing the technology, meeting regulatory requirements, or maintaining performance under high market volatility, trading at scale is a different beast. Bigger isn't always better, and sometimes, the challenges of growth can outweigh the initial benefits. However, if you manage to weed through all the difficulties and get setup, you can make substantial profits. Just when you think the final hurdle has been jumped, here comes the tax man to feed off you like a vulture, and you wonder why you did this... We haven't gotten into clearing rates, leasing or purchasing a membership and bookkeeping which will all have to addressed you have no choice.
I doubt there is any connection to HFT by traders on this board. Best way for reatail is to learn "Price TA". Trade with your eyes... nothing else.
Anyone around here with those aspirations are in the pre-embryonic stage and will inevitably self-abort.
I vaguely remember listening to a Linda Rasky interview a long time ago, in which she said she put in a lot money in an attempt to do algo trading but eventually pulled the plug on the venture. She was in New Market Wizard. She didn't strike me as geeky enough. It was the geeks like Yass and Hull and a few others in that book who did manage to do it successfully..