I received great feedback about this idea. And since I am asking for feedback and help of all you readers I think a great place to start is defining the algos I see all the time. Please leave comments if you see any subsets or any other algos you see often (let’s leave the creative name ones out for a bit).

As far as recording software I would certainly leave it up to the user to figure out what screen capturing software works best for them. I do not want to be responsible for any system problems/troubleshooting. Google screen capturing software and find one that suits your system. Instead of having you email me a ridiculously long file and have issues with that, we set up some space on our server for you to upload the files. To upload your videos onto our server please log onto our ftp server at: ftp://72.167.34.231 username: algos101 password: algomagic. When done uploading your video please send me an email at [email protected] with your comments and name of the video so I can use for the following post.

With that said, let’s get this party started. For today I wanted to start by just defining the algos. I will post the first video in the next entry.

1. Accumulation algo: Usually looks like an algo that buys/sells showing you holds on the bid/offer, accumulates, drops, gets people short on the tape, rebids, etc. Usually identified in ranges/consolidation portions of a chart.
2. Distribution algo: Very similar to the one above. The one major difference is that there doesn’t appear to be follow through on the moves. This tends to occur towards the end of extended moves. Often we get caught up trying to position for another leg that never comes. The smart buying/selling has taken place two legs ago and this one is just showing you buying and selling. Again looks similar to a range/consolidation in charts after extended moves.
3. Driving algo: The one that just blasts the bids/offers. Just needs to get the order in regardless of price seems like.
4. Market making (passive): aka. the GS algo. This one is very ridiculous. Probably the hardest one to identify. Hard to describe but you know it when you see it. Let me compile a few of these to see if i can get my point across. For the most part you can see equal number of prints in size seconds and pennies apart from each transaction.
5. The big order stepping: self explanatory. Takes place in the form of a large order stepping up or holds on the bid/offer stepping getting hit for size.
6. Big order broken down into little pieces: This is the one where you can tell there is buying in the market place hidden in all the 1-200 prints within a small range in price. Time and overall volume are the biggest factors in this one. Figured this one could be a subset of the accumulation algo.
7. Buy to sell: The magic buyer on the bid to sell a more ridiculous amount on the offer. Seen often down trending stocks, stocks that run up very quickly where you can tell it has to be a sell…
8. Sell to buy: the opposite of the one above
9. Buy the new low: the most annoying of all. I hope many of these got destroyed in the mini crash of May 6. 🙂
10. Sell the new high: well, again, what do you expect other than massive selling into the new high to punish the day traders who like to blast the new highs. Looks like massive held offers at the new highs intraday on a stock followed by a severe/out of nowhere exaggerated downtick by all of those who just got caught.
11. The re-bidder: a subset of the accumulation program. The program buys on the bid, gets hit, drops a bit, and rebids for similar quantities.
12. The re-offerer: Similar to the one above.
13. The ultimate screw job: The headaches for most scalpers for size on the street. The big bid/offer where you lose buying/shorting in front and then when you flip.