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View an excerpt of Carley Garner's new book, Higher Probability Commodity Trading, in the current issue of TopShelf Traders e-Magazine!

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Whether you like them or hate them, day traders and algorithmic system traders, commonly referred to as “algos,” are here to stay. Both groups of traders bring additional liquidity to the marketplace, which is a positive. However, some would argue that the baggage they bring with them isn’t worth the additional liquidity. It is no secret that highly day traded markets such as the e-mini S&P experience additional volatility throughout the last hour of the trading session as day traders square their positions. In addition, it is difficult to deny that algo traders haven’t created a marketplace that sees severely abnormal prices at a relatively higher frequency. Nevertheless, the new challenges posed by aggressive day traders and high-frequency traders via computer algorithms aren’t all that different from the obstacles faced by traders during the heyday of open outcry trading; the antagonists are simply wearing a different mask.

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