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Markets & Instruments

High-frequency trading

Intermediate

Also calledHFTalgo tradingalgorithmshigh-frequency traders

Computer programs that send and cancel orders in microseconds to capture tiny price differences.

What it means

Humans can't compete on speed and don't need to: trading on minutes, hours or days makes microseconds irrelevant.

In practice

High-frequency firms act as modern market makers: they quote both sides, trade tiny edges millions of times and keep prices in line across exchanges. Their presence is much of the reason spreads in liquid markets are so narrow.

For a discretionary trader the practical lesson is to compete where speed does not matter. A setup on a 15-minute or 4-hour chart depends on structure and patience, not on reacting within microseconds.

What to watch for

Scalping for a few ticks puts you in direct competition with machines and makes costs the largest part of every trade. Fast liquidity can also vanish in a shock, which is when prices jump.

Entrix Academy

Learn these terms step by step, one lesson free

Entrix Academy is the trading course inside EntrixAlgo. It teaches the ideas in this glossary with interactive lessons, practice and a final exam. It is part of Pro, and a free account opens one lesson of your choice.

  • 129 lessons, start anywhere
  • Practice on every lesson
  • Final exam and certificate