HFT trader John Netto says he’s seeing the complete opposite of the fear-driven notion that high frequency traders are taking over the market.”Traders are actually taking a step back from micro- and milli-second trading,” he told us in an interview recently.
The speed game is wholly owned by the banks and big funds apparently, so now he sees traders trying to improve their algos more than they are trying to increase the speed of each trade.
“There are only so many situations to make money on x number of trades per day,” he says. “So now they’re looking to improve their algos.”
M3 Capital, Netto’s prop trading unit, is one of them.
“We’re not running very many algos,” he says.
“I have a penchant for taking on risk,” he says.
Netto says he was born to be a trader “because it provides a granular scoreboard of how well you’re doing managing your risk.”
And for someone who likes taking risks, relying entirely on algos to trade would probably leave a lot of the qualitative alpha on the table. That’s why he’s been trying out a new strategy, trying to quantify trader’s emotions.
And we suspect that’s also why Netto firmly believes HFT trading will never conquer human trading. Ultimately, he likes to be at the helm and believes others do too.
“People will always be trading differentially. Absolutely.”
Here are some fun facts about Netto:
He has this below his email signature:
The 10 Attributes of a Great Trader:
9. Being Dynamic/Fluid/Flexible
10. Willingness to Learn and Improve
And he signs off his voicemail by saying, “Good luck in the markets.”