HFT (high-frequency trading)

Trader's Glossary · Order flow

Definition. Trading by algorithms that place, modify and cancel orders in fractions of a second. It accounts for a large share of the volume in futures and equity markets.

How it works

HFT firms use very fast connections and servers located close to the exchange. Many act as market makers, providing liquidity; others exploit short-lived price differences.

Example

Orders in the book appear and disappear faster than a human can react. That's largely algorithmic activity.

What to watch out for

An individual trader doesn't compete with HFT on speed. Their edge may lie in context, patience and a longer decision horizon.

♛ The Hetman Terminal is part of Club: live for Dow Jones from the Bishop plan, 6 markets (Dow Jones, S&P 500, Nasdaq, gold, crude oil, Bitcoin) and automatic detection of order flow events from the Rook plan. A session on the ♛ Hetman Index (training, simulated data) in the full panel comes with the Knight plan and above. Compare the plans →

See also

Market maker, DOM (order book), Spoofing.

More in Hetman Capital Club

You'll find the full explanation with graphics, examples and exercises in the 📖 Order flow encyclopedia space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).

Educational content, not investment advice.