You can make money having by having better access like the HFT firms or by having data not widely available. You can also make money by applying well known principles more intelligently than others. This latter approach usually requires a lot of money. You can't afford retail brokerage costs when you're in a highly crowded and competitive trade.

The best way to make some money as a personal trader is to take advantage of the liquidity premium in one way or another. Because you're trading money in the 5 or 6 figures rather than the 7 or 8 figures, you can take advantage of smaller opportunities without thoroughly distorting the market with your own trades. These smaller trades usually require research and market insight rather than clever algorithms. These trades are usually on financial instruments that don't have a lot of easily accessible data to build an automated trade on top of.

> You can't afford retail brokerage costs when you're in a highly crowded and competitive trade.

This is very important. Most brokerage charge around $7 per trade, which makes high-volume trading very very expensive and prohibitive.

Robin Hood is an amazing alternative that charges nada for trades, and once they have an API[1], I think they'd be a great choice for small-time developers looking to do some (low-frequency) algorithmic trading.

[1] https://support.robinhood.com/hc/en-us/articles/210216823-Ro...

If you're serious into retail algotrading, IB (Interactive Brokers) is the best broker you can get.

Can you give an example of the kind of trade you can make in that kind of market? Doesn't matter if it's an old one, I'm just curious where to start looking.

Thanks! That's a very insightful reply

algorithmic trading doesn't equal high frequency trading. people conflate these a lot even though they know better. high frequency trading requires algorithmic trading. but algorithmic trading can implement warren buffet or suzi orman's style if thats what you wanted.

Agreed, HFT has become a catch-all term for anyone trying to make a marketing/political statement about trading. Like the term "big data" - it's been used to describe so many things that it no longer describes anything.

Another thing that gets ignored is the the difference between a trading strategy and an execution algorithm.

I wish I could get some rest API and websockets into the debt and credit default swaps market, really inefficient markets that reveal a lot about sentiment

don't need high frequency at all, just pretty average latency actually (for now anyway)

IB probably has this, not sure though. But those data costs are a huge deterrent for me!

CDS and debt are not really inefficient markets. Some bonds are less liquid than others but there is currently a rapid conversion to electronic trading going on. CDS is also a very mature market. Not saying that those markets don't contain signal but they are not very inefficient.

You're right, I would primarily like to see them more liquid so that there were more data points to extrapolate moves across different asset classes

What you really want is more transparent data. There are plenty of data points but they are not easily accessible.

and I think the lack of this perpetuates market inefficiencies. I think insights into CDS can be a leading indicator into equities and equity futures, yet CDS are restricted to OTC markets in the US

anyway, I'm sure this is its own discussion

CDS isn't an OTC instruments. Swaps are now traded on SEFs like MarketAxess or TradeWeb. Just because you don't have access to the data don't think that professionals don't. But this isn't OHLC data for listed equities. Expect to pay. Actually high quality realtime equity data (ITCH,PITCH,OpenBook Ultra,etc...) costs real money as well.

Checkout CDS and FI market data offerings: https://www.marketaxess.com/data/marketdata.php

But your idea is correct. CDS Spreads can be predictive of dramatic shocks in an equities price.

That is awesome

Yeah i get the promise: professionals do this, pay a premium for that

Until they don't because someone provides the data for free or next to nothing

In this town we call it disruption

Who's going to provide that data for free when they can charge a LOT of money for access to it. Ever notice why free data on Google or Yahoo are 15 min delayed?

I know what the exchanges charge for data access, and even if you pay it is in an antiquated format.

Tradier has been providing equity and option tick data for free for years in a clean RESTful API with the capability of websockets and streaming. So thats the answer to your question of who.

Like I said, in this town we call it disruption.

Thats part of their business model. I have not used their data but I can tell you that all tick data is not created equally.

We are unlikely to ever see CDS data for free since individuals cannot trade them as most retail investors are not Eligible Contract Participant. Some brokerages give away data to get people to trade with them so there its about customer acquisition.

I am a developer that has done a few projects on the tradier API. Agreed

I think DTCC has some freely available live CDS data but I forget where and don't know how the APIs are.

No. Compare any big banks revenues from trading against the revenues of a public HFT firm like virtu. No contest.