Do high-intensity trades affect forex traders?

The short answer to the title of this article is: Yes. However, I'm not sure if you really understand the rules of this game.

Maybe everyone has seen in documentaries that show on TV one of the big punks or a giant shark as he swims while a few small fish hover around him to wait for some crumbs when the giant feeds on a big fish. However, these small fish may themselves become part of the shark at some point. When it comes to forex trading, individual traders may also become easy meal for Forex traders. In fact, if they decide to enter the world of high-density trades, they may swim in dangerous waters.

Trading is mainly based on information processing, both inbound and outbound. In the 19th century, renowned banking investor Baron Rothschild was asked why he could always invest in the right companies and the right time. His answer was simply: "pigeon-pigeon". In fact the man was able to get information faster and more widely than others. Well, this was using 19th century technology. Let us now turn to the twentieth century. I remember that when I was trading in physical goods, I had to make long distance phone calls or even send telegrams and then wait for several hours to get some important trading information. In today's world, pigeons become digitally digitized and fly at the speed of light.

High-intensity trading strategies usually involve opening and holding positions for very short periods, sometimes up to a few seconds. The computers assigned to this mode of trading are directly connected with the market to receive data flow and execute orders as they are associated with the credit lines of major banks. The expenses of these transactions are negotiated, and the difference between bid prices and the question is less than any individual trader can find. Of course, such a high-speed trading pattern is only appropriate for major players in financial markets such as mutual funds and institutional traders.

The data is processed and analyzed and transactions are executed via high-speed computers. Believe it or not, these logarithms collect data from thousands of sources, then identify keywords and infer probabilities in short periods measured in microseconds. Even if the individual trader receives the same data at the same time, the HFT computers have absorbed the news, selected a trading center, executed and closed the deal, making small profits even before the retail investor has finished reading the same information. Behind these logarithms lie some of the best minds in this world - physicists in particular - and specialists in new and sophisticated probabilistic models. In fact, I can say that we are in the era of space trading.

Needless to say, huge investment is required in the infrastructure to develop special trading logarithms, provide high-speed computers, access market and execute transactions as quickly as possible. But it may not be as bad as it may seem at first sight. We can even go away and say that traders who apply high-density trading patterns are very similar to market makers and other stock market specialists. Where they provide liquidity and volatility - both good for all traders, large and small alike. However, playing with them is not a good idea for small larvae.

Thus, the best strategy for an individual Forex trader is to stay in a clear area and use a different strategy. In order to compete you must have some advantage, so retailers should not try to compete with their high-density counterparts. That's why they have to play their own game where they have some advantage. There are many other strategies that an individual investor can use with all success. And do not worry about what is called market manipulation because the forex market is so big that it's hard for someone or someone to manipulate it and there are lots of crumbs for everyone. You should never think of competing with the big scalings unless you have the affordability of infrastructure and bank credit lines to be able to play this game.