School of Algos 101

gmanGilbert Mendez's (Gman's) Blogs16 Comments

Thanks to all for the comments on my last blog regarding algos. I thought over the weekend about the best possible way for all of us to learn about these pesty computer programs and here is my suggestion.

I always believed the best way to learn something complex is by using a dynamic and interactive technique. I thought it would make sense if everyone contributed a 3-5mins piece of tape on an algo they see and let everyone comment on it and we can all dissect the good, the bad and the noise.

I will start with a piece of tape on my next entry where I’ll offer my comments and let you guys offer your questions and comments. Feel free to send your tapes in .wmv or .flv format to [email protected]

Here are some suggestions on tapes:

1. Accumulation algo
2. Distribution algo
3. Driving algo
4. Market making (passive)
5. The big order stepping
6. Big order broken down into little pieces
7. Buy to sell
8. Sell to buy
9. Buy the new low
10. Sell the new high
11. The re-bidder
12. The re-offerer
13. Crush it like grape
14. The black swan
15. The terminator

That’s a pretty good start for now. If you guys have a better suggestion/approach I am all ears. Happy trading.

Oh yes I made up the last three but if you find a new algo we can totally brand that sucker.

16 Comments on “School of Algos 101”

  1. i always called one of them “the goose” because it gooses the market higher with a large bid size that seems to disappear once it starts getting hit only to reappear moments later, the bid is really herky jerky, not the smooth methodical order filling bid, the algo jerks the market higher on large size, he uses this play to position short, once he drops his bid the market makes a move lower, this usually happens on continuation plays, the market is moving out of a redistribution or re-accumulation. this is what you might mean by “big bid stepping up” however that should be contrasted with “strong bid stepping up” and “small bid stepping up”

    thanks for the great idea gman. i would really like to take part in this. i thought about doing this with my trading buddies because we would need many sets of eyes to be able to piece it all together. unfortunately none of them read tape.

    if you have a moment could you give a few lines of explanation or maybe an example of each so that we are on the same page. I would like to contribute more but could use a little explanation of the algos. thanks gman. you are conducting the most practical and useful trading discussion on the entire internet.

    god bless.

    thanks.

    traderlars

  2. i always called one of them “the goose” because it gooses the market higher with a large bid size that seems to disappear once it starts getting hit only to reappear moments later, the bid is really herky jerky, not the smooth methodical order filling bid, the algo jerks the market higher on large size, he uses this play to position short, once he drops his bid the market makes a move lower, this usually happens on continuation plays, the market is moving out of a redistribution or re-accumulation. this is what you might mean by “big bid stepping up” however that should be contrasted with “strong bid stepping up” and “small bid stepping up”

    thanks for the great idea gman. i would really like to take part in this. i thought about doing this with my trading buddies because we would need many sets of eyes to be able to piece it all together. unfortunately none of them read tape.

    if you have a moment could you give a few lines of explanation or maybe an example of each so that we are on the same page. I would like to contribute more but could use a little explanation of the algos. thanks gman. you are conducting the most practical and useful trading discussion on the entire internet.

    god bless.

    thanks.

    traderlars

  3. i always called one of them “the goose” because it gooses the market higher with a large bid size that seems to disappear once it starts getting hit only to reappear moments later, the bid is really herky jerky, not the smooth methodical order filling bid, the algo jerks the market higher on large size, he uses this play to position short, once he drops his bid the market makes a move lower, this usually happens on continuation plays, the market is moving out of a redistribution or re-accumulation. this is what you might mean by “big bid stepping up” however that should be contrasted with “strong bid stepping up” and “small bid stepping up”

    thanks for the great idea gman. i would really like to take part in this. i thought about doing this with my trading buddies because we would need many sets of eyes to be able to piece it all together. unfortunately none of them read tape.

    if you have a moment could you give a few lines of explanation or maybe an example of each so that we are on the same page. I would like to contribute more but could use a little explanation of the algos. thanks gman. you are conducting the most practical and useful trading discussion on the entire internet.

    god bless.

    thanks.

    traderlars

  4. What is the algo that sells off shares to a penny? Is that the terminator, or something else like: nuclear war in the middle east, long term is now 24 hours, say bye bye to planet earth algo?

  5. What is the algo that sells off shares to a penny? Is that the terminator, or something else like: nuclear war in the middle east, long term is now 24 hours, say bye bye to planet earth algo?

  6. What is the algo that sells off shares to a penny? Is that the terminator, or something else like: nuclear war in the middle east, long term is now 24 hours, say bye bye to planet earth algo?

  11. This is a great idea. What do you guys use to create the videos in .flv .mpg or .wmv?

  12. This is a great idea. What do you guys use to create the videos in .flv .mpg or .wmv?

  15. Sirs!
    I implore you, do not forgot about buy-to-sell’s variant, the reverse pullbacker bagger and its nefarious offshoot the reverse pullbacker-bagger-bagger, aka, the red tea bagger, whereby pullback sellers at resistance are squeezed into submission just as the auction violently reverses and resumes downward. Of course there is the more straightforward cousin of sell-to-buy, the pullbacker-bagger and its n-iterations.
    And Lo! Let us not forget about our lunchtime or post-London close favorites, the cumulative-volume-delta-neutralizing algos, or simply, the delta-eaters, easily tuned to favor zero-sum solutions or, more often, in their flying-PigBot variation, to squeeze globex shorts to cover at new highs, where new short inventory can be positioned by those with the craftiest algos, as well as by those, like me, who see clearly their handiwork.

  16. Sirs!
    I implore you, do not forgot about buy-to-sell’s variant, the reverse pullbacker bagger and its nefarious offshoot the reverse pullbacker-bagger-bagger, aka, the red tea bagger, whereby pullback sellers at resistance are squeezed into submission just as the auction violently reverses and resumes downward. Of course there is the more straightforward cousin of sell-to-buy, the pullbacker-bagger and its n-iterations.
    And Lo! Let us not forget about our lunchtime or post-London close favorites, the cumulative-volume-delta-neutralizing algos, or simply, the delta-eaters, easily tuned to favor zero-sum solutions or, more often, in their flying-PigBot variation, to squeeze globex shorts to cover at new highs, where new short inventory can be positioned by those with the craftiest algos, as well as by those, like me, who see clearly their handiwork.

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