High Frequency Trading (HFT) involves the concept of “Order Types”, which signals a trader to enter or exit a position. According to Reuters, Order types can reach an estimated 2,000 variations as a fully electronic market and more than 50 trading venues have multiplied the possibilities of how, when and with whom to trade.
Clearly, the rules of the game is redefined by the Order Types and their correct implementation in the marketplace. Amidst a long list, we touch upon some of the popular ones, frequently used by HFT practitioners. The following Infographic shows 4 HFT Order Types, and examples when a buy or sell order is placed.
You may also start learning popular automated trading strategies like ‘VWAP‘, ‘Index Arbitrage’, ‘Statistical Arbitrage’ and ‘Event Driven Strategies’. We also have a series of articles on ‘Statistics for Trading Strategies‘ explaining multiple aspects i.e. Historical data analysis, distributions, regression, correlation and co-integration.
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If you’re a retail trader or a tech professional looking to start your own automated trading desk, start high-frequency trading training today! Begin with basic concepts like automated trading architecture, market microstructure, strategy backtesting system and order management system. You can also enrol in EPAT, one of the most extensive algo trading courses available in the industry.