Do you think the HFT bots talk to each other? If they did, what would it sound like? A stream of 1’s and 0’s? A stream of 1 contract trades perhaps? Hmm. Let’s investigate.
Right before Thursday’s High we had one stream of over 500 trades each of 1 contract, closely followed by another stream of almost 1,000 trades each of 1 contract. All at the Ask. The market went 1 point higher, reversed and spent the rest of the day correcting by 10 points.
Right before Friday’s Low we had 3 bursts, each of over 150 trades of 1 contract all at the Bid. The market went 1 point lower, reversed and rallied by over 8 points.
Coincidence? Conspiracy theory? Machines talking to each other? Take a look for yourself. What do you think? And if you’re a HFT who wants to spill the beans or pull back the curtain for us “mere mortals”, please email me.
Bot Signal generating good trades
In the month since this post went out, no one has spilled the beans. So we’re none the wiser about what’s going on. BUT – a few brave traders have coded the Bot Signal and it’s generated some nice signals. Here are a few.
From Tim Q.
“Hey Barry, Love your site. I’ve been a follower for about 3 years now. I’m sure you noticed the BOT signal going off today at 1:09 PM. Great entry short for my OSOK! Thanks so much for sharing your insights.” Tim Q.
From Stephen C.
“I coded the Bot signal. Showed @ 14:10, short @ 52 covered @ 47 for 5 points. fyi” Stephen C.
And from Kevin
“After reviewing your BOT video, I configured a simple indicator to signal if a BOT is plotted on the 500 tick bar chart with CQG data provider for Ninja Trader.
Today, after ECB rally on ES (pre-market open) the signal was made. I entered a short at yesterday’s value area High 1588.00 and made the OSOK with a cover @ 1584.” Kevin
Good luck with your Emini trading.