Economy
The Evolution of Fast Trading Techniques
Within the last few decades, the world of stock trading has radically evolved—from a pace of execution measured in minutes to milliseconds. As traders strive to capitalize on market opportunities that may only exist for a few seconds, they will continue to evolve rapid trading techniques to meet the demands of today’s fast-moving financial markets. As technology continues to reshape the contours of financial markets, traders entertain ever-innovative ways that truly equip them to engage in rapid trading at unmatched speeds.
Staying abreast of developments is thus paramount to success. Resources such as Exness Insights help them get all the information they need on the latest trends and technologies in rapid trading—to afford them a deeper understanding of the mechanics behind trading today.
This article looks at the evolution of high-speed trading practices—from the manual handling that first inspired speed traders to today’s high-frequency trading, plus other common techniques.
The Early Days of Rapid Trading
Until the technological revolution, stock trading was entirely manual in nature, wherein traders needed to be physically present on the floor of the exchange and call out orders. It would take minutes or more at times to execute the trades, often depending on the trader’s capability of moving fast and viewing emerging opportunities in real time.
It was only natural that once computers came into use in the 1970s and 1980s, the first automatic trading systems should have begun to make their appearance.
Developers created the early generations of automatic trading systems to assist traders by processing orders electronically, which increased speed and efficiency.
The Emergence of High-Frequency Trading
High-frequency trading as a major innovation came into being through the late 1990s. Algorithms and super-fast technology form the basis of systems that can execute thousands of trades in just a second. High-frequency trading systems generally hunt for minute price disparities in the market. A well-designed, super-fast computer-based high-frequency trading system can process gargantuan amounts of data with order executions in milliseconds.
Using very small changes in price, high-frequency traders take advantage by executing trades faster than human traders could react to. That, in turn, uses a sophisticated infrastructure of low-latency data connections and colocated servers near the stock exchanges for the least possible delay. It is because of this that HFTs are so speedy; traders can exploit opportunities across multiple markets simultaneously, creating more liquidity and therefore a more efficient market altogether.
With great power comes great controversy, though, as the rise of HFT has brought with it a number of concerns regarding market volatility. The sheer number of trades in such a short span can create wild variances in stock prices.
Algorithmic Trading and Scalping Strategies
The most widespread algorithmic trading style is scalping, whereby the trader executes numerous trades throughout the day, each intended to take advantage of tiny movements in prices. Scalpers rely on fast execution and high levels of liquidity to enter positions that could last several minutes or even mere seconds while collecting minuscule profits on each trade.
Algorithmics and scalping trading have both become indispensable parts of rapid trading strategies. Those traders who will be able to master this technique stand to gain from the fast pace of today’s financial markets, where speed and precision are of essence.
The Future of Rapid Trading Technique
As technology progresses, the forward motions of rapid trading will only continue to accelerate and evolve further. Today, artificial intelligence and machine learning are already embedded in trading algorithms, enabling traders to predict market movements with far greater accuracy than ever before. Consequently, through vast amounts of historical data, pattern identification provides AI-powered trading systems with real-time decisions unreachable by humans.
Another sphere that might highly influence the increasing speed—and therefore effectiveness—of rapid trading is quantum computing. Quantum computers can process information at speeds that are exponentially higher compared to conventional computers, which means that the execution speed of the trade will go up, and traders will be in a position to analyze market conditions in great depth until now not achieved.
Outpacing the Competition in Rapid Trading
In rapid trading, an individual’s success largely depends on how informed and flexible they can be. With the continuous evolution in technology, it means that traders have to keep innovating strategies to compete with the increasingly rapid motion of the markets. Properly understanding the history of rapid trading, from the purely manual processes through to today’s sophisticated algorithms, gives a number of insights helpful for traders to keep their efficiency high in a competitive, swift environment.
This would require the proper tools and timely updates on development so that traders could stay ahead of the game and take advantage of the possibilities of rapid trading.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.24 per cent on Wednesday, December 17, pulling the Unlisted Security Index (NSI) up by 8.62 points to 3,614.64 points from 3,606.02 points.
In the same vein, the market capitalisation added N4.72 billion to close at N2.164 billion compared with the N2.160 trillion it ended on Tuesday.
The growth was inspired by four securities, which finished on the gainers’ log, neutralising the losses printed by two other securities on the trading platform.
MRS Oil Plc gained N17.90 on Wednesday to end at N196.90 per unit versus N179.00 per unit, NASD Plc appreciated by 59 Kobo to N58.50 per share from N57.91 per share, FrieslandCampina Wamco Nigeria Plc added 15 Kobo to sell at N60.19 per unit versus N60.04 per unit, and Industrial and General Insurance (IGI) Plc rose by 6 Kobo to 64 Kobo per share from 58 Kobo per share.
On the flip side, Golden Capital Plc extended its loss by 76 Kobo to end at N7.75 per unit versus N8.51 per unit, and Central Securities Clearing System (CSCS) Plc slipped by 35 Kobo to N39.65 per share from N40.00 per share.
Yesterday, the volume of transactions increased by 737.3 per cent to 20.4 million units from 2.4 million units, but the value of trades fell by 33.8 per cent to N72.2 million from N109.1 million, and the number of deals slid by 62.5 per cent to 21 deals from 56 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value on a year-to-date basis with 5.8 billion units sold for N16.4 billion, the second position was occupied by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and the third place was taken by MRS Oil Plc with 36.1 million units worth N4.9 billion.
InfraCredit Plc was also the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, followed by IGI Plc with 1.2 billion units valued at N420.7 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Dipo Olowookere
A 0.26 per cent growth was achieved by the Nigerian Exchange (NGX) Limited on Wednesday on the back of sustained bargain-hunting by investors.
This happened despite a pocket of profit-taking, with industrial goods losing 0.63 per cent and the energy index shedding 0.05 per cent.
But the insurance space increased by 2.02 per cent, the banking counter appreciated by 1.48 per cent, the commodity sector improved by 0.48 per cent, and the consumer goods segment rose by 0.03 per cent.
Consequently, the All-Share Index (ASI) went up by 383.71 points to 149,842.82 points from 149,459.11 points and the market capitalisation jumped by N244 billion to N95.525 trillion from N95.281 trillion.
The market breadth index remained positive after the bourse finished with 38 price gainers and 23 price losers, indicating a strong investor sentiment.
The quartet of First Holdco, Lasaco Assurance, Veritas Kapital, and Prestige Assurance gained 10.00 per cent to quote at N39.60, N2.75, N1.76, and N1.65, respectively, while Mecure Industries grew by 9.92 per cent to N50.40.
Conversely, Living Trust Mortgage Bank lost 10.00 per cent to close at N3.15, International Energy Insurance dropped 9.92 per cent to trade at N2.27, McNichols shrank by 6.90 per cent to N2.97, Omatek decreased by 6.84 per cent to N1.09, and Chams dipped by 6.41 per cent to N2.92.
The activity level witnessed a significant surge at midweek, with Ecobank trading 5.3 billion units for N168.7 billion.
Further, First Holdco sold 108.2 million units worth N4.2 billion, Sterling Holdings exchanged 87.3 million units valued at N606.2 million, FCMB transacted 74.3 million units worth N783.6 million, and Access Holdings sold 41.5 million units for N841.4 million.
At the close of trades, market participants traded 5.9 billion units valued at N216.2 billion in 25,205 deals compared with the 1.0 billion units worth N21.8 billion traded in 23,701 deals a day earlier, showing a rise in the trading volume, value, and number of deals by 490.00 per cent, 891.74 per cent, and 6.35 per cent, respectively.
By Adedapo Adesanya
The Naira depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, December 17, by N3.67 or 0.25 per cent, closing at N1,455.49/$1, in contrast to Tuesday’s closing price of N1,451.82/$1.
Also, the local currency weakened against the Euro in the official market at midweek by 98 Kobo to close at N1,706.72/€1 versus the previous session’s price of N1,705.74/€1, but improved against the Pound Sterling by 75 Kobo to trade at N1,943.28/£1 compared with the N1,943.98/£1 it traded a day earlier.
At the GTBank forex counter, the Nigerian currency lost N3 against the greenback to finish at N1,463/$1 versus N1,460/$1 and in the parallel market, it remained unchanged at N1,475/$1.
Thin US dollar inflows from exporters, non-bank corporate, foreign portfolio investors and absence of immediate intervention of the Central Bank of Nigeria (CBN) to strengthen supply triggered fresh pressure.
This is coming off the back of decline in inflows through the Nigerian Foreign Exchange Market which decreased to $716.3 million last week from $844.70 million in the previous week , a 15 per cent drop in a week.
The intervention comes as the CBN expect inflows from Detty December to alleviate need for FX demand, but exorbitant local prices may be keeping spending at bay.
Regardless of the seasonal demand, positive FX support for the local currency through 2025 signals a deliberate action to ensure the local currency maintains the trading range amidst growing external reserves. Latest data showed that gross external reserves position advanced to $45.47 billion, reflecting a 11.2 per cent Year-to-Date (YTD) gain.
In the cryptocurrency market, there was selling pressure as traders liquidated positions amid a short-rally, leading Litecoin (LTC) to slip by 5.2 per cent to close at $75.12m, as Cardano (ADA) depreciated by 5.0 per cent to $0.3619, and Dogecoin (DOGE) lost 4.8 per cent to finish at $0.1247.
In addition, Ripple (XRP) depreciated by 4.7 per cent to $1.83, Solana (SOL) crashed by 4.1 per cent to $122.62, Ethereum (ETH) went down by 3.9 per cent to $2,826.62, Binance Coin (BNB) fell by 3.4 per cent to $833.07, and Bitcoin (BTC) tumbled by 0.5 per cent to sell at $86,436.66, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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