High Frequency Traders Are “Parasites” That Erode Investor Confidence: Polcari

[jeff of pa]

I have to agree with this



It was inevitable. No sooner had word gotten out that Knight Capital (KCG) had managed to find a way to survive, and the focus of debate has changed to something more sinister. As stupid or careless as Knight's admitted software glitch or mistake was, it would never have happened had it not been for the legion of computer-assisted, high-speed traders who prowl the markets in search of opportunities exactly like this - then pounce. Knight's blunder was their bounty.
Whether you call them high frequency traders, H-F-T's or algos (shorthand for algorithmic or computerized trading programs), by any name they are "parasites" says Kenny Polcari, Managing Director at ICAP.
"When you sit down and look at really what is the role that high frequency traders play, it's frustrating," Polcari says in the attached video. "What are they really here for? They're buying and selling 100 share lots, up and down for pennies all day long."



High Frequency Traders Are

 

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[vor]

I have to agree with this



It was inevitable. No sooner had word gotten out that Knight Capital (KCG) had managed to find a way to survive, and the focus of debate has changed to something more sinister. As stupid or careless as Knight's admitted software glitch or mistake was, it would never have happened had it not been for the legion of computer-assisted, high-speed traders who prowl the markets in search of opportunities exactly like this - then pounce. Knight's blunder was their bounty.
Whether you call them high frequency traders, H-F-T's or algos (shorthand for algorithmic or computerized trading programs), by any name they are "parasites" says Kenny Polcari, Managing Director at ICAP.
"When you sit down and look at really what is the role that high frequency traders play, it's frustrating," Polcari says in the attached video. "What are they really here for? They're buying and selling 100 share lots, up and down for pennies all day long."

High Frequency Traders Are

How they make money at clipping pennies on 100 share lots is hard to imagine. But in as they create volatility, I am all for it. Hard to make any money trading a stagnant market.

 

[TreasureWriter]

Kenny Polcari is regarded as a loudmouth losing trader on the floor. He manages Icap Equities. In an up trending market as we have right now; They are down over 100 points YTD going from $489.00 to $336.00 and are a bad investment. Polcari is at the helm of this fiasco.



I trade and invest for a living so I probably understand more than most folks who have never traded. I've been trading for over 12 years beginning with an initial $500 investment in 2000 and running it to $53,000 and change by the end of 2001. That's over 100x the initial investment. I've been trading ever since and I quit my day job as a technical trainer. If I was only making "pennies" or trading for pennies; it wouldn't be worth my time. I am also a published author in the use of technical indicators and on how to use the MetaTrader 4 trading platform; for what it's worth.

What I know is.....

Day traders account for about 11% of the volume in the stock market. The large funds and financial institutions account for 89%. They trade hundreds of thousands or millions of shares at a time sometimes in the very short term and they are the ones that create the wild swings in some stocks as they take their profit or hedge. The majority of small traders lose their money because they thought it would be a get rich quick scheme and know nothing about the business of trading. It's people like Polcari that try to take advantage of these novice traders, hoping that they are on the other end of the trade they are making.

A day trader cannot move a market. My trades of 100 or 1000 shares don't even put a blip on the screen. Only the big funds have this ability and they use it to manipulate stocks. If you're watching a level II NASDAQ screen, you'll learn to recognize who is pumping and dumping and it's not the small trader working from his home. Polcari has once again stuck his foot in his mouth. If the interviewer was trade savvy they should have asked Polcari why he keeps losing money and if he is willing to refund his management fees to the investors that trusted him with their money? It sounds to me like Polcari is the "Parasite"; feeding off of his investors.

As a trader I look at technicals, volume and trend and I capture a smaller move in price out of the middle of a larger move. It sounds to me like Polcari got burned again and is looking for someone to blame as usual for his losses and mistakes. I'd like to know what trade he lost on and check to see who was on the other side of it....He probably bought into a large sell off by a large fund that was disguised well by their broker.

Just another big mouth trying to make a name for himself on Bloomberg News. Really folks...if you want to know something about trading...would you ask a guy that only loses money? This isn't news...it's sensationalism trying to stir up controversy.

Look at the charts and the numbers for Icap Equities.....They don't lie but apparently their trader does!

Cheers

 

[vor]

As a trader I look at technicals, volume and trend....

You can throw out technicals in this market and just go with trends. Dont need to worry about volume either if you only trade high volume shares. In fact, low volume is often good for you on a ride down the slopes.

Works for me anyway.