|The Intelligent Investor by Benjamin Graham|
Before we continue to talk about other aspects of high frequency trading, I would like to share one of the investment books I have read - <<The Intelligent Investors>> by Graham, which talks about how to follow a simple principle for value investment in stock markets. To summary, it is only about patience, discipline and consistent. then you can beat at least the market.
As one of the developers for high frequency traders, I know that we must fear and avoid combating with them. I highly suggest that if you are trading in stock markets personally, you had better stop short term trading, unless all following conditions are met:
- your algorithm system does not compete directly with other professional traders
- your algorithm does not depends on performance of your system
- your algorithm works well only with small enough amount of cash that it will not impact market movements
I myself is trading in Singapore Stock Exchange and China Stock Exchange following the direction of this book <<The Intelligent Investor>>. And luckily both exchanges do not have sophisticated high frequency trading that I can still run some simple spread strategies manually on top of value investment. Other reasons I am doing these simple strategies together with value investment are that there is no such luxury time to follow the market closely as a full time software engineer, and I don't like the idea to stare at market data daily. We need to spend time to enjoy our life, right? Money is important but not everything anyway.