High-Frequency Trading

What is High-Frequency Trading?

High-frequency trading (HFT) is a type of trading that makes use of algorithms to assess and carry out a lot of trades quickly, typically in a matter of seconds. The objective is to capitalize on tiny price discrepancies in the market. Every time they trade, the traders make a small profit, to build up to a sizable profit over time.

The trading strategy makes short-term price predictions to identify market conditions that are either invisible to the human eye or too rapid for a human reaction. As they examine real-time market data and information to find advantageous possibilities, the algorithms manage the timeline for transmitting market orders.

HFT trading is appropriate for arbitrage trading, bid-ask trading, and other short-term trading strategies that have comparable algorithmic needs.