This virtual workshop discusses different types of automated trading strategies including high-frequency trading, arbitrage, scalping, and quantitative trading. It outlines implementation challenges for these strategies related to speed, data frequency, costs, and risk management. The workshop also provides an overview of how Advanced Markets can help with implementing such strategies through their institutional brokerage services.

1. Virtual Workshop
Algorithmic, Quantitative, HFT, Arbitrage,
Scalping strategies and where to trade them
Presented by:
Raphael Ribeaucourt
VP of Institutional Sales, Advanced Markets
Natallia Hunik
Chief Revenue Officer, Advanced Markets

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▪ Stock market: 90%
▪ FX Market: 80%
Automated Trading in
different markets
Source : https://link.springer.com/chapter/10.1007%2F978-3-030-02351-5_30

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- High-Frequency Trading (HFT)
- Arbitrage
- Scalping
- Quant trading
Specialized Types of
Automated Trading
$$$

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Do you need an office?
Arbitrage
Traditional:
• Triangular arbitrage
• Interest rates arbitrage
• Covered interest rates arbitrage
OTC FX Specific:
• Latency arbitrage
• Cross-broker Arbitrage
• Technology Arbitrage
• Event Arbitrage

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1 Technology Costs - co-location and speed
2 Transaction costs
Arbitrage strategies implementation challenges
3 Some strategies are not sustainable, need to manage many accounts

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HFT, or
High
Frequency
Trading

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Internal processing: one 64 millionth of a second
HFT strategies implementation challenges-SPEED
Internal processing: less than 1 millisecond
Equities FX

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HFT strategies implementation challenges - data frequency
Market data delivered
in 500ms packets → unsuited

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Scalping

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• Risky in volatile markets
• Some brokers don’t allow
• Diligent cost controls need to be applied
• Fill rates
Scalping strategies implementation challenges

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• Quantitative analysis
• Data-based models
• Statistical methods
• Use of advanced mathematical models
• Price and volume are two of the more common data inputs
Quant Trading

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• Lack of FX data availability
• No uniform data
• Lack of transparency
• Market and data fragmentation
• Cost of market data
Quant strategies implementation challenges

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Implementing Automatic Strategies on Retail Platforms
Source:
https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/workingpapers/wp0418.pdf

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More than half a century ago
J.M. Keynes, the famous
economist noted that:
‘The markets can stay irrational
longer than you can stay
solvent.’
Risk management

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• Ideal conditions presumed
• All-in trading costs not factored in
• Execution speed and liquidity aren’t
acknowledged
• Slippage underestimated
Summary: Typical mistakes in FX algo models

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How can Advanced
Markets help?

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• Institutional Brokerage with first tier access to bank &
hedge fund liquidity
• UK FCA and ASIC licensed
• FIX API and co-location available
• Depth of market available
• High tick frequency update rate
• FX, metals, CFDs on indices, crypto and single stocks
• Price engines in NY4 and LD4 data centers