How to Trade High Frequency Trading

This is Eric Golden and my guest today is Jordi Alexander. Jordi is a poker player turned quantitative trader. While Jordi was trained in high-frequency trading, he has a deep passion for macro and taking fundamental positions that computer models may disagree with. We take full advantage of Jordi's breadth of knowledge in this wide-ranging conversation.

We first dive into the mysterious world of high-frequency trading and Jordi's experience at GETCO, Tower, and then leaving to build his own firm, Selini Capital. We discuss Crypto's product market fit, how Jordi assesses the value of Bitcoin and Ethereum, the Balaji bet, and more. Please enjoy my conversation with Jordi Alexander.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Show Notes

(00:00:32) - (First question) - Exploring how high-frequency traders (HFTs) have generated profits in recent years

(00:02:50) - The utilization of technology to forecast the movement of asset classes

(00:04:24) - Why he focuses on prediction over speed in trading strategies

(00:05:36) - Methods for evaluating the effectiveness of a trading strategy

(00:06:42) - The aggressive tactics that HFT firms employ to protect their advantages

(00:09:27) - How COVID-19 changed the landscape of news trading

(00:11:13) - The importance of talent and finding niches in HFT

(00:12:37) - His decision to pursue an entrepreneurial path and establish Selini Capital

(00:13:47) - How culture and incentives in the HFT industry impacted the genesis of Selini

(00:20:17) - Finding an edge as a smaller team against giants with more resources

(00:21:30) - Why he and his team started to transition to crypto

(00:24:41) - His perception of other trading firms as Selini moved into the crypto space

(00:27:17) - A breakdown of how the team at Selini Capital is structured  

(00:29:40) - Why Selini avoids taking outside capital from LPs 

(00:30:29) - How Selini operates in both the crypto and fixed-income asset classes  

(00:31:11) - Why his non-technical background positions him to approach the market differently

(00:36:09) - Using the dog and the fox parable to describe his view of crypto in the long term   

(00:38:06) - The roles human psychology and survival strategies play in the crypto landscape

(00:40:25) - Drawing comparisons between financial markets and gambling

(00:43:11) - Advice on what exposure newcomers should have in the crypto space

(00:45:07) - His thoughts on Balaji’s outlook on Bitcoin

(00:47:43) - Creating new money in a way that is globally accepted and fair for everyone

(00:50:04) - His thoughts on crypto regulation and international adoption abroad

(00:54:32) - What he’s most excited to build over the next six months and six years 

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