High-frequency trading (HFT)

Modified on Fri, 24 Apr at 8:33 PM

What is High-Frequency Trading (HFT) 

  • High-Frequency Trading (HFT): 
    trading strategy that uses: 

  • Advanced Expert Advisors (EAs) 

  • High-speed networks 

  • Executes a large number of trades within: 
    ➤ Milliseconds to seconds 

  • Objective: 
    ➤ Profit from very small price movements and market inefficiencies 

 

Restriction Policy 

  • HFT is NOT allowed 

 

Why HFT is Restricted 

Market Manipulation Risk 

  • HFT can: 

  • Distort real market prices 

  • Create artificial demand or supply 

  • Generate misleading market activity 

➡️ This can influence other traders and lead to unfair advantages 

 

Market Instability 

  • High trading frequency can: 

  • Increase volatility 

  • Cause erratic price movements 

  • Create unstable market conditions 

➡️ Makes it harder for traders to make informed decisions 

 

Technical Risks 

  • Extremely high trade volume in short timeframes can: 

  • Overload trading servers 

  • Cause platform freezes or delays 

➡️ This may lead to execution issues and unintended consequences 

 

Rule Summary 

  • Trading strategies must: 
    ✔️ Be stable and controlled 
    ✔️ Avoid excessive trade frequency 

  • High-frequency execution strategies: 
    ❌ Are strictly prohibited 

 

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