Experts from the Bank of Russia came to a conclusion that the Russian segment of the currency market is managed by robots. Forex does not account for a big share in Russia’s economy. So, just three high-frequency trading (HFT) robots are enough to conquer this niche.
For the RUB/USD pair, three robots preprogrammed for algorithmic trading generate two thirds of overall liquidity, provided by all HFT in Russia. “To sum it up, a share of HFT market participants trading the most liquid financial instruments on exchange floors accounts for from one third to half of the whole trade volume,” the survey reads. Interestingly, the conclusion of the Bank of Russia did not come as a surprise to traders. Russian market participants are well aware of what is going on. They have encountered those superfast changes in assets’ prices which a human eye can hardly keep track of. This conclusion seems to be a revelation just for the Bank of Russia. Perhaps, the time is ripe for the Russian regulator to determine its policy on cryptocurrencies and the bitcoin in particular.
Back to the theme of algorithmic trading … Nowadays, an asset could trade at virtually any price as it is determined by an owner of a high-frequency trading robot. One of the most widespread strategies in HFT is spoofing, which is abused by large market players. A robot opens a huge number of bidding or offering orders with the intention of cancelling them before execution. Other market participants, including robots, take notice of it and execute their deals. Thus, a scamming robot or spoofer ensures that the price reaches a required level without spending any funds.
