“Exploratory Trading” and Momentum Ignition

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December, 2012

We have heard the term “momentum ignition” tossed around a lot lately.  A recent Credit Suisse report said that momentum ignition was an HFT strategy.  They defined momentum ignition as when “an instigator takes a pre-position; instigates other market participants to trade aggressively in response, causing a price move; then trades out.”

A new paper titled “Exploratory Trading”  written by Adam Clark-Joseph from Harvard University attempts to explain how high frequency traders use exploratory trading techniques (or momentum ignition) to make their

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