📖 Financial Lexicon Term
What is High-Frequency Trading (HFT)?
Algorithmic trading characterized by high speeds, high turnover rates, and high order-to-trade ratios.
Detailed Explanation
HFT utilizes powerful computers to transact a large number of orders in fractions of a second. While institutional HFT provides market liquidity, retail HFT is usually restricted to specific prop firm evaluations that allow 'HFT passing bots' to exploit demo-environment execution.
💡 Practical Trading Example
An HFT bot passes a $100K prop firm challenge in exactly 4 seconds by executing 500 micro-trades during a news spike.