Are High Frequency Trading Robots Stealing Your Money?

When it comes to trading — forget the noise — forget everything but you, your charts, your money and your goals.

I spend a lot of time researching the markets and trading strategies and trading psychology — and I hear a lot of people talking about a number of things that are supposed to affect the movement of stocks — and why certain traders just can’t win.

High frequency traders — the smart money — the government — the dark pools — all of these guys are apparently different potential market manipulators who are watching your every move and causing you to lose at trading —

And I have to call bullshit.

Just like when you are out there — in the ocean — paddling for waves — it’s just you — and the water — and your board — and your skill level.

Yes — you might be out there surfing with friends — but — essentially — YOU ARE ALONE.

You are the one who makes it all happen.

You decide when paddle out — you decide where to paddle out — you decide which waves you want to catch — and you decide how long you want to surf for.

The same is true for trading.

Think about it for a second. Who decided to open a brokerage account?  You did.  Who decided to fund the account? You did. Who opened your charting package this morning? You did. Who opened your internet browser and your brokerage account? You did. Who looked for a trade? You did. Who decided to make a trade?

That’s right. You did.

Not the dark pools, or the government, or Donald Trump, or the smart money, or anyone else.

You did.

So let’s go deeper into this idea of personal trading responsibility and take a look at a chart for a moment.

1 chart — in AN OCEAN of CHARTS — in a sea of over 7,500 charts — because that’s how many we have to choose from.

PCTI – PC-Tel Incorporated.

Here’s PCTI — making a new 50 day high — on March 28th, 2017 at $6.25.

Nice.  Good for PCTI.  New highs are awesome.

Now think about that price for a second.


Let that number sink in for a moment —

Because that’s what we care about, don’t we?  Prices.  That’s the level we’re buying and selling at.

A number.  A dollar amount.  A price.


So could you have bought PCTI at $6.25?  Meaning — was that price available to you?

Yes.  It was.

$6.25 was available to you.  As was $6.24 and $6.23 and $6.22 and $6.21 and $6.20.

I know this because around 21,000 shares were traded between $6.20 and $6.25 in the last hour of trading on March 28th, 2017.

There you go — there’s the 5 minute chart of the last hour of trading on 3.28.17.

And here’s where the shares were traded.

Do you see?

Here is a stock — trading at various prices over an hour — and traders are doing what they do — buying and selling at a price

Whichever price they decide.

Could those shares be “dark pools” — or “the government” or “your neighbor’s grandmother”?

Yes.  They could be all of those participants.

But they could also be you.

Because when you are alone at your computer — there are no “dark pools” whispering in your ear — there is no “Government” — there are no “high frequency traders”.


There’s just you — and your chart — and your brokerage account.

You can set a limit order, a market order, a stop-limit buy order — anything you want.

And you had an hour.

Seriously.  Go back and look at the chart — between 3:00 and 3:10 price sat at $6.23 and no one bought and no one sold.

You could have easily been in there.

Anyway — I’m sure you can see where I’m going with this, so let’s get it over with.

Here’s PCTI over the next 3 days —

You get it?

$PCTIup 14% in 3 days — and the only thing you had to do was buy between $6.20 and $6.25.

And you could have easily done that.

Because there’s just YOU — and your CHARTS — and your BROKERAGE ACCOUNT.

You are the one.

You are.

You decide when and where to buy.  You decide how much to buy.  You decide how long to hold.  You decide when to sell.

That’s it.

So turn off the news, learn the method that works best for you — scalping — swing trading — position trading — counter trend trading — stocks — options — futures — whatever.

You decide.  Learn it.  Learn the market.  But most of all —

Learn yourself.

Learn how it feels to risk money.  Learn how greedy you are.  Learn how fearful you are.  Learn how you feel about winning and losing.  Learn how your own mind works.

And know —



One Response

  1. Barry April 9, 2017

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