Strategies topic hub

Trading strategies

still alpha

Where the rest of the machine cashes out into P&L. There are really only three ways an automated trader makes money: provide liquidity, predict the next move, or exploit a structural gap.

What's in this topic

7 families, each linking down to the ideas inside it.

Statistical arbitrage01
Trade a portfolio of correlated instruments on the bet that temporary statistical relationships revert. The edge is the average behaviour of many small, diversified positions, not any single forecast.
commoditised
Directional event trading02
Take a directional position around an event (release, earnings, breaking news) before the price fully reprices. The slow-drift edge is gone; the surviving edge is latency-to-react and correct interpretation.
still alpha
Market making03
Quote both sides, earn the spread on uninformed flow, manage inventory, and survive adverse selection. The single biggest live commercial family: structural, still alpha for the equipped.
structural IX-AS
Order-flow information04
Quote around a better fair value inferred from order flow, and manage adverse selection by reading toxicity. Where the modern market-making edge actually sits: microprice, OFI, VPIN.
still alpha
Latency arbitrage05
Pick off a stale quote on a slow venue before it updates to match a fast one. As a structural feature it happens every day; as an open opportunity in mature equities it is a commoditised, winner-takes-all arms race.
commoditised IX-LATENCY
Market manipulation06
The illegal shadow of real strategies: faking liquidity or news to move the price. Covered here for recognition and detection only, never as an operational how-to.
dead
Machine learning in HFT07
Not a fifth strategy family but a toolkit across all of them. Genuine lift on feature-rich, high-sample problems (microstructure signals, news NLP) and overpromised everywhere else.
still alpha

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