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High Frequency Algorithmic / Automated Trading


Those dealing in high frequency trading can improve their chances of success by utilising automated algorithmic software trading platforms. The solutions, strategies, systems and programmes made available through these platforms can take much of the risk and overreaction potential out of "day trading" of financial instruments by professional traders.

Algorithmic platforms are used throughout the financial world in all sectors.  There are underlying patterns in even the most volatile and chaotic financial transactions, most of which can be analysed and forecast mathematically. While these systems are not crystal balls and do not yield perfect predictions, they can more accurate than going by “gut instinct” and they facilitate the all-important task of removing emotion from the buy and sell decisions.

For the purposes of trading financial instruments, the algorithmic platforms would analyze and make moves based on absolute frequency patterns.  These are derived from statistical mathematical models that describe the total number of observations or trials within a given interval ("frequency bin"). Although there is no size limit to them, the frequency bins have to be mutually exclusive and exhaustive, and their data get put into a certain group. 

For investors, this relates to things such as grouped data; for example a certain stock's return percentages over different intervals of time. Let's say these are arranged from the lowest to the highest. Absolute frequency might relate to how many observations were made and stored as data regarding the time periods where a stock returned anywhere from 10 to 12 percent. If there were 72 observations or trials made with regards to that stock and that return in the time period, then the absolute frequency would be 72.

This is of great importance to high frequency traders, because they have to attempt to pinpoint the consistent and probable performance ranges of given financial instruments. These professionals are often dealing in versions of stock index funds like the E-mini S&Ps because they seek consistency and risk-mitigation along with top performance. They must filter market data to work into their software programming so that there is the lowest latency and highest liquidity at the time for placing stop-losses and/or taking profits. With high volatility in these markets, this becomes a complex and potentially nerve-wracking endeavor, where a small mistake can lead to a large loss. Absolute frequency data play into the development of the trader's pre-programmed instructions.

Some of the safest algorithmic high frequency trading platforms can be provided by the Kyte Group. We have made significant investments in recent years to create an infrastructure which is the "perfect" environment for low latency, high frequency trading.  



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The Kyte Group Limited was founded by David Kyte in 1985 on LIFFE, the embryonic futures exchange in the heart of the City of London.
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Kyte's customers are market professionals, either sole traders, teams of market,
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Providing clearing and settlement services to professional traders who transact business on the world's leading exchanges.
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