High frequency trading (HFT) is a trading strategy used by institutional traders to execute trades with extremely small delays. This trading strategy involves specialist hardware and software to allow traders to follow rapid, small market movements. In some cases, specialised cables allow traders to access market information microseconds before other traders, allowing them to respond to large orders or news events before other traders are even aware of them.
When HFT began to become prominent around 2008-2011, it was the centre of a controversy around the fairness or not of this practice. Practices such as front-running and spoofing can be performed semi-legally using HFT strategies, to the chagrin of other market participants. The effects on the overall market of HFT traders are still unclear.
Specialist HFT firms dominate the space. This is for the simple reason that HFT is highly expensive and requires extensive outlays on server space, high-powered computing and more. Sometimes these facilities are available for hire to traders who cannot afford to buy them outright, but the HFT space is still dominated by dedicated institutional players.
ADSS offers a range of global markets for traders, with CFD opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.