It is not about algotrading. It is about quantitative automated trading
> The phrase “algorithmic trading” has a different meaning depending on if you are in Chicago or New York. In Chicago it will mean using a computer to place trades to try to make a profit. In New York it means to use a computer to work client orders to try to minimize impact.
Max was a fresh out of college graduate at the time, so his usage was a bit off. Knowing this distinction is a sign of actual experience on the street.
However, loads of people (and, according to Max’ document, Chicago) refer to automated trading as “algo trading”. Cue the descriptivist vs prescriptivist linguist debate.
"..is a type of trading done with the use of mathematical formulas run by powerful computers.."
"..makes use of much more complex formulas, combined with mathematical models and human oversight, to make decisions to buy or sell financial securities on an exchange.."
[1]: https://www.investopedia.com/terms/a/algorithmictrading.asp
Ps: In simple english, I go to work, that thing makes profit (if done right). I go to sleep, that thing makes profit. Someone important twits, that thing either makes profit, OR goes bust.
It’s not uncommon to take an HFT trade that is competitive in the US or German markets and go around applying it to markets like Tokyo, London, Singapore, Etc. But the converse is not usually as successful.
So if you start in Tokyo, it might be harder to move up and out just due to more restrictive regulatory frameworks and less efficient markets there.
For the large organizations, they got far more complicate systems/servers/software, but these practically do the same thing, just on a massive scale.
The point of all this is that algorithmic trading in the industry sense of the term is a product that banks and brokers can sell to buy side funds. "You make the decisions, and we'll handle the execution." If a large org is using algorithmic trading, there's a good chance they're paying someone to do it for them.