minvera, I have on many occasions noted my order to be first in the queue at a price (not at the bid/sell price), and noted that orders would appear and then disappear above mine at that price???. I have once seen orders placed above me at my price in the auction queue.
I accept it happens with transaction sequencing all the time...and they'll use the excuse it's XT,CX,CXXT and all the other queue jumping 'legals' to basically allow them to 'do what they want'. And why doesn't ASIC do anything, because volatility is king...not investing....volatility enhances liquidity and liquidity allows the generation of faster profits, which means the process is aimed at gambling (I'm sure if they could figure out a way to money launder via ASX they would... or do they already).
You'll often see the same numeric bid/sell order numbers in a queue which means that either one account has multiple access or one broker is using multiple accounts to generate the same computer number (ie one computer generating the same logic.....one entity). If it were the intention of ASIC to stop willful misguidance of the bidding process then ASIC should tell those brokers to stop generating the same bid/sell numbers (change the Algo generator for each order) so that it doesn't look so obvious.
HFT, shorting and other manipulation processes are aimed to strip the market. As with all big business / big money the parasites follow. And if your big enough you can direct individual stocks. How else would the following occur:-
from moneymorning.com.au ------------------------------------------ ....take this story from Bloomberg back in May:
'Goldman Sachs Group Inc. (GS), which generated about half its revenue from trading last quarter, posted losses from that business on two days in the first three months of 2013, compared with one day a year earlier.'
If we assume there were 60 trading days in the first quarter, it means Goldman Sachs traders made profits 96.7% of the time.
In the world of trading that's an unheard of strike rate. Most traders are happy to make profits on just half their trades.
Even if you factor in the large number of traders on Goldman Sachs' trading desk, the law of averages would still dictate a win rate close to what an individual trader can achieve.
So there's only one explanation - the big boys have a secret advantage compared to every other investor. But it's not just insider knowledge. Until recently they've had another advantage...
Humans v Computers
Over the past few years, some folks have made a lot of noise about the influence of computer trading at the big banks and hedge funds. Another name for it is algorithmic or 'algo' trading.
Many worried that computers would take over the world. Some feared it would even be the end of investing as we know it.
