Commentary

Tim Quast
Traders Magazine Online News

We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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August 31, 2002

The Master Trader

By Editorial Staff

Whereas an ordinary trader often spends most of his time watching the price action on the tape, the master trader looks beneath the surface and tries to understand more about the fundamentals of a company and the relevance of catalysts such as earnings announcements, brokerage house upgrades or downgrades, and other newsworthy events that may affect the price of a stock.

When he sees something happening on the tape, he tries to understand the implications of events. He is looking for the real explanation of what is going on and recognizes the importance of understanding the underlying issues. He wants to know whether a company is managing its business well and listens carefully and skeptically to reports of company representatives, as well as Wall Street analysts, so as to form an educated view about the direction of a company and its stock.'

(From, The Psychology of Risk, page 172)