High-Frequency Trader Subjectivity Emotional Attachment and Discipline in An Era of Algorithms

Socio-Economic Review Advance Access published August 19, 2016
Socio-Economic Review, 2016, Vol. 0, No. 0, 1–24

doi: 10.1093/ser/mww013
Article
Article
High-frequency trader subjectivity:

emotional attachment and discipline in an
Downloaded from http://ser.oxfordjournals.org/ at University of Lethbridge on August 20, 2016

era of algorithms
Christian Borch* and Ann-Christina Lange
Department of Management, Politics and Philosophy, Copenhagen Business School,
Porcelaenshaven 18A, DK-2000 Frederiksberg, Denmark
*Correspondence: cbo.mpp@cbs.dk
Abstract
In this article, we examine the recent shift in financial markets toward high-
frequency trading (HFT). This turn is being legitimized with reference to how algo-
rithms are allegedly more rational and efficient than human traders, and less prone
to emotionally motivated decisions. We argue that although HFT does not render
humans irrelevant, it is leading to a reconfiguration of both the ideal trading subject
and the human–machine relations. Drawing on interviews with and ethnographic
observations of high-frequency traders, as well as HFT ‘how to’ books, we analyze
the subjectivity and self-techniques of the ideal high-frequency trader. We demon-
strate that these traders face the challenge of avoiding emotional interference in
their algorithms and that they deploy a set of disciplinary self-techniques to curb the
importance of emotional attachment.
Key words: financial markets, economic sociology, skills, sociology, USA
JEL classification: G1; Z13
1. Introduction
On Monday July 6, 2015, the Chicago Mercantile Exchange (CME) ‘rang the closing bell
on open-outcry futures markets [. . .] after a few dozen Chicago traders donned their multi-
colored jackets to buy and sell soybean and Eurodollar futures the old-fashioned way one
last time’ (Reuters, 2015). While keeping the options pits alive, the CME’s decision to shut
the futures pits—iconic emblems of Chicago-style trading—put it, belatedly, on a par with
many other exchanges around the world. With few exceptions, the open-outcry pits of today
are relics of a bygone era, and mainly serve to maintain a popular image of how financial
C The Author 2016. Published by Oxford University Press and the Society for the Advancement of Socio-Economics.
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2 C. Borch and A.-C. Lange
markets operate—as is evident when trading pits continue to serve as a backdrop to financial
news reporting. For most (other) practical purposes, pit trading has ceased to be important.
The abandonment of pit trading has been propelled by several factors, including techno-
logical advances and regulation aimed at improving market efficiency. More important than
the backdrop to the demise of pit trading is the question of what replaced it. The short
answer is electronic or computerized trading, but this can be further divided into different
phases. One phase that has attracted a lot of attention from sociologists and anthropologists
is electronic trading in the form of ‘click’ or ‘screen’ trading, in which traders, working in
large trading rooms, engage with the market via numerous computer screens and execute
orders by clicking their mouse (e.g. Knorr Cetina and Bruegger, 2000, 2002; Zaloom,
2006).

During the past decade or so, financial markets have witnessed a new phase of electronic
trading characterized by an intensified computerization of markets, which has both acceler-
ated previous developments and led to important qualitative changes. Most notably, new
forms of fully automated computerized trading have emerged, in which trades are executed
by preprogrammed algorithms without any direct human intervention. So while click/screen
trading reduced the inter-human element of pit trading by transforming trading into a
trader–screen relationship (Knorr Cetina and Bruegger, 2002), present-day algorithmic trad-
ing has moved trading into a fully digital space, in which the human element has apparently
disappeared entirely and is replaced by algorithms that interact with other algorithms
(MacKenzie, 2015b; Lange, 2015; see also Pitluck, 2011). In this article, we examine a sub-
set of this turn toward algorithmic trading, namely so-called high-frequency trading (HFT),
which refers to fully automated trading in which orders are executed by preprogrammed
algorithms in fractions of a second.
More specifically, we are interested in how the turn to HFT produces new trader subjec-
tivities. This might seem counterintuitive, since, as we shall return to, algorithmic trading
and HFT are often lauded as ways of excising humans and their alleged biases from the trad-
ing process. However, we argue that although HFT does seem to mark the beginning of a
post-human era, in the sense that high-frequency traders (HF traders) are competing on a
scale far beyond human perception (Johnson et al., 2013), the shift to HFT does not render
the human level entirely obsolete. This is not to suggest, in a trite manner, that behind every
algorithm there is an individual on whom we must focus in order to understand HFT socio-
logically.1 Rather, our assertion is that, in a similar manner to how click/screen trading
reshaped trader subjectivity vis-a-vis pit-trading subjectivity, HFT appears to once again
recast trader subjectivity. Here, we draw inspiration from the work of Caitlin Zaloom
(2006) and Karin Knorr Cetina and Urs Bruegger (2000, 2002), who have forcefully demon-
strated how technology influences, shapes and reconfigures trader subjectivity: traders con-
stantly engage with technologies, and new technologies are likely to prompt new ways of
acting and thinking in markets. Consequently, in this article we aim to understand how
trader subjectivity changes with HFT. Specifically, and once again inspired by the work of
Zaloom and Knorr Cetina and Bruegger, we focus in particular on the role of emotional
attachment and the disciplinary self-techniques of HF traders. We do so by examining both
1 However, identifying the individuals behind the algorithms is important to legal and regulatory
bodies, since liability is ascribed to subjects, and financial algorithms are (still) not considered legal
subjects (see also Coombs, 2016; Kunz and Martin, 2015; Lenglet, 2011).
High-frequency trader subjectivity 3
idealized prescriptions for how to best act as a HF trader, as well as their daily routines and
self-perceptions.
Studying trader subjectivity in HFT allows us to contribute to the extant sociological
scholarship in this field. While a few studies attend to the kinds of social interaction that may
be generated among HFT algorithms (Seyfert, 2014; Borch et al., 2015; Lange, 2015;
MacKenzie, 2015b), or to regulatory issues relating to HFT (Arnoldi, 2016; Marti and
Scherer, 2016), the still-sparse sociological literature on HFT has mainly focused on the tech-
nological dimensions of this new type of trading (MacKenzie et al., 2012; MacKenzie, 2014b,
2015a). This makes sense, as HFT has sparked a veritable technological arms race, in which
trading companies invest billions of dollars to reduce by a few milliseconds the time it takes
to transmit data, e.g. by deploying new fiber-optic cables or utilizing microwaves (Hammer,

2013, Ch. 6; MacKenzie, 2014a; Lewis, 2014). This literature has emphasized the technologi-
cal dimensions of HFT, but has been less occupied with understanding the effects of HFT on
trader subjectivity. In this article, we seek to demonstrate that HFT involves strong elements
of continuity, in the sense that HF trader subjectivity shares important features with pre-HFT
forms of trader subjectivity, as well as significant intensifications and accelerations of, as well
as changes to, the trader subjectivity that characterized pit and click/screen trading. We insist
that both dimensions—continuity and change—are crucial if we are to properly understand
HFT and its consequences for how traders relate to markets and technology.
The article is structured as follows. In Section 2, we present our theoretical framework,
which combines insights from the seminal work of Zaloom, Knorr Cetina and Bruegger,
and Michel Foucault. Section 3 outlines our data and methods. In Section 4, we offer a gen-
eral portrait of the ‘ideal’ HF trader subject and the kinds of skills and competences he or
she should ideally possess, according to the industry. Section 5 demonstrates how HF trad-
ers consider emotions as something to be avoided. While pit and click/screen traders would
often be concerned about how to prevent their emotions from interfering with their direct
engagement with markets, HF traders struggle to avoid a more indirect impact, namely emo-
tional interference in their algorithms. In Section 6, we discuss how HF traders deploy vari-
ous forms of discipline in order to curb their emotional attachment to their algorithms. The
conclusion summarizes and points to further research.
2. Trader subjectivity, markets and technology

In this article, we are interested in how individual HF traders deal with the market and its
changing technologies. What kinds of relationships do traders establish with their algo-
rithms and with the markets? What skills are deemed important to HFT? What types of
challenges do HF traders face, and how do they respond to them? Finally, how do HF trad-
ers conduct themselves in order to improve their performance? In order to develop a frame-
work for answering these questions, we attend to the work of Zaloom, Knorr Cetina and
Bruegger, and Foucault. In the following, we present the core ideas from these resources
upon which we will expand.
The broadest type of inspiration is derived from Foucault’s reflections on subjectivity.
Foucault proposed that subjectivity can be analyzed both as something externally imposed
(subjectification) and as something internally levied (subjection). One famous example of
subjectification is how the invention of the panoptic prison in the 18th century was origi-
nally praised as a means of shaping inmates as docile citizens (Foucault, 1977). Following
that lead, research on financial markets has demonstrated how particular forms of market
knowledge and technologies, e.g. relating to credit and lending, have shaped gendered, cal-
culative, and entrepreneurial subjects (e.g. Deville, 2012; Hall and Appleyard, 2012;
Langley and Leaver, 2012). The key point here is that such ‘financial subjects [. . .] are fabri-
cated in the production of financial markets’ (Langley and Leyshon, 2012, p. 370).
At the end of his career, Foucault became increasingly interested in supplanting the study
of subjectification with that of subjection. The point of this shift in focus was to argue that
subject formation can also take place when the individual subjects him- or herself to particu-
lar techniques of the self, defined as:
techniques that permit individuals to effect, by their own means, a certain number of operations

on their own bodies, their own souls, their own thoughts, their own conduct, and this in a man-
ner so as to transform themselves, modify themselves, and to attain a certain state of perfection,
happiness, purity, supernatural power. (1997, p. 177)
Such techniques of the self are of particular interest to investigations of traders and their
behavior, which is why we will focus our attention on this aspect of trader subjectivity.
First, however, we should make one further remark about our Foucauldian inspiration.
Foucault’s interest in the subject centered upon prescriptions for how to best shape subjects
or shape oneself as a subject, regardless of whether such prescriptions were actually followed
in real life. Accordingly, Foucault’s (1992, p. 12) analytical approach might be said to be
programmatic in nature, rather than oriented toward practice. However, it is a central
Foucauldian point that prescriptions for conduct will often play some practical role, either
because they are in fact to some extent followed, or because they may serve as a benchmark
against which actual behavior is measured (Foucault, 1991, p. 81; Borch, 2015). In other
words, the discursive construction of idealized subjectivity may spill over into actual proc-
esses of subjectification and subjection—a point that reverberates with recent debates about
performativity in financial markets (e.g. De Goede, 2005; MacKenzie, 2006). In our analy-
sis, we wish to complement the discursive/prescriptive level with a practice level, the latter of
which constitutes the more sociological component of the analysis.
In doing so, we continue in the footsteps of previous work on trader subjectivity, which
combined Foucauldian input with ethnographic work in order to account for the techniques
of the self that traders deploy in practice to improve themselves and their performance.
Notably, Zaloom has demonstrated (drawing explicitly on Foucault’s notion of techniques of
the self) that pit traders and click/screen traders alike are preoccupied with transforming and
conducting themselves in ways that ensure a disciplined approach to trading. For such traders,
Zaloom notes, ‘discipline is both an idealized state and a concrete set of internal strategies’
(2006, p. 127). In other words, discipline is something that can be achieved (one can become a
disciplined trader), but this requires a number of skills that can only be learned by working on
and cultivating the self—and thereby unlearning one’s inclination toward undisciplined trad-
ing behavior. On the basis of her ethnographic work conducted in the late 1990s, in the midst
of the transition from pit trading to electronic trading, Zaloom singles out four central techni-
ques of the self commonly deployed by traders (2006, p. 128 et passim):
(1) Traders work to ensure a separation between their actions as traders and their outside
lives, so that the latter do not affect the former;
(2) They seek to control the impact of losses on trading behavior, so that one or more losses
will not lead them to make excessively risky trades in an attempt to regain the losses;
(3) They attempt to break down narratives of success and failure in order to treat each trade
in isolation (and so as to not be fooled by apparent sequences of success or failure);
(4) They learn to focus acutely on the situation on the market at any given moment, in
order to become fully absorbed in it.
By modifying their selves in ways consistent with these recommendations, a disciplined

trader self surfaces that, in its most radical form, is ‘purge[d] [. . .] of affect and individual-
ity’, a state of mind that purportedly allows for optimal economic decision-making (2006,
p. 128). While pit traders would usually learn such skills in apprenticeship programs,

Zaloom describes how the click/screen traders she followed were subjected to training ses-
sions and ongoing monitoring, as well as being requested to ‘turn in weekly journals in
which they analyzed their trading, giving reasons behind trades and confessing lapses in dis-
cipline or exulting in successes in maintaining a regulated trading practice’ (2006, p. 130).
Interestingly, this emphasis on self-reporting, self-reflection and confession bears close
resemblance to the techniques and advice that proliferate in self-help and ‘how to’ literature
more broadly (e.g. Bröckling, 2005). We shall return to financial ‘how to’ literature below.
A central point of Zaloom’s investigation is that the transition from pit to click/screen
trading had two major effects. First, it ‘changed where the market was’, in the concrete sense
that the market was no longer situated in the pit, but existed on computer screens (2006,
p. 5). This meant, second, that human traders had to relate differently to the market:
Traders were now expected to watch the market and act on it, rather than being the market and
acting in it. The technological possibilities of digital systems raised the interconnected problems
of how the material form of the market and the human form of market reason should be related.
(2006, p. 6)
However, the move from pit to click/screen trading should not be interpreted as a clear-
cut transition, in which the new electronic configuration rendered obsolete previous forms
of trader subjectivity. As Zaloom’s observations on discipline make clear, the move to click/
screen trading was characterized by certain continuities. Regardless of whether a trader is
facing a noisy pit or a calm electronic trading room, success depends on discipline.
Nonetheless, the different settings do give different accents to the kind of discipline required.
For example, Zaloom describes how, in an active pit, boredom would rarely be a problem
for traders. In click/screen trading, in contrast, ‘[o]ne of the greatest challenges [. . .] are peri-
ods when very little is happening’, during which traders must learn to suppress the tempta-
tion ‘to take a position for the sheer stimulation of being in the game’ (2006, p. 137).
Our analysis draws much of its inspiration from Zaloom’s Foucault-inspired examina-
tion of the kinds of discipline and techniques of the self that traders deploy in the pit and
click/screen trading domains. We will argue that, on a generic level, many of Zaloom’s
observations are also applicable to HF trading subjectivity, but HFT also introduces impor-
tant intensifications of and alterations to the subjectivities identified in pre-HFT settings.
Our analysis is further inspired by Knorr Cetina and Bruegger’s emphasis on traders’ emo-
tional attachment to markets, which in their analysis is a matter of how, for click/screen
traders, ‘their body and the screen world [are] melting together in what appears to be a total
immersion in the action in which they are taking part’ (2000, p. 146). We attend to emo-
tional attachment precisely because it is often rendered problematic by traders. Despite their
ubiquitous nature—‘emotions are always part of the market’ (Zaloom, 2006, p. 54)—
emotions are frequently seen by traders as something to be avoided in order to become suc-
cessful (e.g. Smith, 1999, pp. 160–161). In fact, the disciplinary techniques identified by
Zaloom are for the most part responses to the challenges that emotional attachment may
produce for traders, such as the interference of emotions on trading decisions.
We attend to Knorr Cetina and Bruegger’s analysis because it demonstrates how, despite
the electronification of markets, particular forms of emotional attachment persist. We will
argue that this is also the case for the second phase of electronification analyzed in this
article, namely the transition toward fully automated trading. Consequently, the inspiration

we take from Foucault, Knorr Cetina and Bruegger, and Zaloom revolves around emotional
attachment, discipline and techniques of the self. Focusing on these dimensions will enable
us to portray key elements of contemporary HF trader subjectivity.
3. Data and methods

In attending to how HF trader subjectivity is both practically manifested and discursively
constructed, we draw on two main types of data: (a) ethnographic observations of and inter-
views with HF traders, and (b) what we broadly refer to as ‘how to’ books and manuals on
becoming a successful trader in an era of HFT. Due to their prescriptive dimension (their rec-
ommendations for proper conduct), such ‘how to’ books are, as we shall shortly explain, in
line with Foucault’s recommendations for what should be included in an analysis of subjec-
tivity. In contrast, conducting interviews and engaging in ethnographic fieldwork was not
part of Foucault’s own methodological toolkit. However, in recent years, scholars have
argued that Foucault’s approach can be combined with more ethnographically driven analy-
ses (e.g. Hill, 2009; but also Zaloom, 2006). For the purposes of the present article, this
combination of sources and methods does indeed make sense, partly because interviews and
ethnographic observations provide a better sense of the field that the ‘how to’ books cover
(and seek to co-constitute), and partly because certain tropes circulate between the ‘how to’
books and the field. For example, our interviewees often address the struggles that HF trad-
ers face, many of which relate directly or indirectly to the content of the discursive-
prescriptive ‘how to’ literature.2 In addition, when we ask HF traders to explain their
conduct, their responses are not merely descriptive, but also normative and indirectly pre-
scriptive, as they often legitimize specific forms of HFT conduct and outline how one ought
to conduct oneself as a trader in an HFT era.
2 This is the case despite the fact that the main audience of financial ‘how to’ books historically has
been retail investors, while our interviewees are professional traders, and despite the fact that these
professional HF traders often ridicule ‘how to’ books, arguing that as soon as a trading strategy is
made public, it ceases to be profitable. Trading edge depends to a large degree on keeping one’s
strategies secret. However, this is not critical to our analysis, mainly because we are not interested
in trading strategies as such (which are often rather generically portrayed in the literature), but in
how the ‘how to’ books portray the ideal trading subject and the kinds of techniques of the self that
must be deployed to become such an ideal subject. Here, the overlaps with the professional practi-
tioners’ level are often more pronounced than these traders seem to acknowledge.
Since April 2014, interviews have been conducted with 22 HF traders in Chicago and
New York. In this context, ‘HF traders’ refers to persons who either currently participate in
HFT (in accordance with the definition below) or have done so in the past. Some HF traders
were interviewed more than once. An additional 40 interviews were conducted with other
actors in the HFT industry, such as regulators, exchange officials, software providers, and
infrastructure and clearance firms. With a few exceptions, these supplementary interviews
are not referred to directly below, but they inform the analysis and contribute insights into,
e.g. how to set up a proprietary trading shop in the HFT domain. When conducting the
interviews, we followed a semi-structured, open-ended interview guide. The interviews typi-
cally lasted around 1 h, but some were significantly longer. In addition, in spring 2014, one
of the authors spent 6 weeks conducting ethnographic observations inside an HFT firm near

Wall Street, with follow-up observations in October 2014. The ethnographic work focused
on daily practices and conversations among HF traders, including how they trade at their
desk while monitoring preprogrammed algorithms.3
The interviews were, as a rule, recorded and transcribed. A few interviewees would not
allow us to record the conversation, but did allow notes to be taken. The transcripts and
notes were coded thematically, allowing us to identify trends and patterns across the texts.
Furthermore, transcripts were compared with the notes taken during the ethnographic
observations. In the analysis below, we paraphrase and quote in order to illustrate the gen-
eral patterns and trends revealed in the interviews (Rubin and Rubin, 2005). To ensure the
validity of the examples and quotes used (and for research-ethics purposes), a draft version
of the article was sent for approval to the persons quoted.
Although HFT is a relatively new phenomenon, there is an extensive array of literature
that provides insight into how it operates, and which newcomers may deploy in pursuit of a
successful HFT career. Here, we are only concerned with a subset of this literature, namely
books that contain a prescriptive dimension. In Foucault’s (1992, p. 12) words, prescriptive
books ‘suggest rules of conduct’, i.e. they prescribe how to behave in order to become (in
our case) a successful HF trader. As such, these books portray, in an idealized manner, how
the HF trader should think and act in relation to markets and new forms of trading technol-
ogy. Such books would typically pinpoint particular problems of which HF traders should
be aware, as well as allegedly adequate responses, in the form of techniques of the self
(although they rarely, if ever, deploy that terminology explicitly). The HFT ‘how to’ books
included in our analysis are those that, in their titles, subtitles or content, display prescriptive
or advice-giving traits.4 To give a few examples, the books we analyze include Building
Winning Algorithmic Trading Systems (Davey, 2014), Quantitative Trading: How to Build
Your Own Algorithmic Trading Business (Chan, 2009), Trading the Measured Move: A
3 It is worth noting that our analysis mainly concerns the USA and that there appear to be certain geo-
graphically based differences in the composition of US HFT firms. Our interviews indicate that people
in the HFT industry in Chicago are more likely to have a floor-trading background than those in New
York. However, this difference is not particularly significant in relation to the present article, as our
findings suggest that the former floor-based traders who transition into the HFT industry tend to
work in clearance and as technology providers, rather than as actual HF traders who algorithmically
execute orders. The reasons for this will become clear in the analysis below.
4 Within the genre of HFT ‘how to’ books, we have decided to focus only on those that seek to give
advice to traders who wish to utilize HFT. We do not address the alternative type of ‘how to’ litera-
ture that focuses on how to survive as a non-HFT day trader in an HFT era (e.g. Oliveira, 2014).
Path to Trading Success in a World of Algos and High-Frequency Trading (Halsey, 2014),
Dark Pools & High-Frequency Trading for Dummies (Vaananen, 2015) and All About
High-Frequency Trading (Durbin, 2010), the cover of which promises that the book pro-
vides ‘the easy way to get started’ and ‘everything you need to know’.
Focusing on manuals for success enables us not only to analyze idealized accounts of HF
trader subjectivity, but also to compare these with pre-HFT accounts. In the pre-HFT era,
an immense number of books were published on how to beat the market. We shall briefly
relate to some of this literature, specifically in the prominent field of contrarian investment
theory, in order to demonstrate that some of the present-day advice on how to become a suc-
cessful HF trader evokes older (early-20th-century) tropes.
Two central methodological issues regarding sociological studies of HFT should be

addressed: generalizability and delineation. With regard to the latter, while most market
professionals have a sense of what HFT means, there is no generally accepted definition of
the phenomenon. The US Securities and Exchange Commission (SEC) defines HF traders as
‘professional traders acting in a proprietary capacity that engage in strategies that generate a
large number of trades on a daily basis’ (Securities and Exchange Commission, 2010, p. 45).
A working group under another US regulatory body, the Commodity Futures Trading
Commission (CFTC), has proposed a broader definition that focuses more on the trading
activity itself rather than on those engaged in it:
High frequency trading is a form of automated trading that employs:

(a) algorithms for decision making, order initiation, generation, routing or execution, for each
individual transaction without human direction;
(b) high speed connections to markets for order entry; and
(c) low-latency technology that is designed to minimize response times, including proximity
and co-location services;
(d) high rates of orders or quotes submitted (CFTC, 2012).
We subscribe to this latter definition. However, the lack of a hegemonic definition of

HFT entails a need for extra caution when it comes to the use of ‘how to’ books in our anal-
ysis (although not so much for the interviews, as most of our interviewees would fit the
CFTC definition). At times, HFT is conflated with algorithmic trading, whereas it is in fact
better described as a subset of algorithmic trading, as per the CFTC definition. In order to
avoid any problems, we exclusively focus on books on algorithmic trading that (a) contain
explicit discussions of HFT (which is often the case), and/or (b) discuss aspects of algorith-
mic trading that most people within the field would also apply to the subset of HFT (such as
how (not) to relate emotionally to one’s algorithms).
The transition to HFT entails a number of changes in the organizational structure of
trading firms. Analyzing these changes in detail would require a separate article, but it is
worth noting that, with some notable exceptions, HFT firms are often small-scale propriet-
ary trading firms. This means that traders do not trade on behalf of clients, but from their
own account. Moreover, these firms often operate in a team-based manner. A trading team
would usually consist of a developer, a programmer and someone with expertise in finance.
Within such a team, it is difficult to separate the ‘trader’ function from that of the pro-
grammer and developer—they somehow coalesce. That said, it is crucial for the purposes of
this article to stress that in spite of this team-based organization, which might seem to
devalue the meaning of the notion of a trader (in the traditional sense, as the singular
individual executing orders), these actors nevertheless typically describe themselves as ‘trad-
ers’. It is, in other words, an emic term—and hence also the term used here. However, it is
worthwhile reflecting on why the notion of ‘traders’ is so persistent, if, in fact, the separation
between ‘front office’ (traders and analysts) and ‘back office’ (software and technology) that
used to characterize financial institutions (Lépinay, 2011; Muniesa et al., 2011) is being dis-
mantled within some HFT firms. While we do not have any solid data on this, we can offer
speculation. It may be that ‘trader’ remains the preferred identity (as opposed to, e.g. ‘pro-
grammer’ or ‘software developer’) because it is seen to carry more positive connotations.5
However, there might also be a more pecuniary explanation. As Oliver Godehot (2012, p.
461) has demonstrated, bonuses and wage increases tend to accrue among front-office staff,
at the relative expense of back-office colleagues. Given that this is likely to be a well-known

dynamic in financial markets, it makes economic sense to portray one’s job identity in front-
office terms.
The question of generalization is trickier. The field of HFT is highly secretive, and gain-
ing access is incredibly hard. As a result, nobody knows precisely how many HFT firms are
operating, which makes it difficult to generalize from our interviews and observations to the
entire field (a difficulty also faced by other sociologists, see MacKenzie, 2014b, pp. 14–15).
Furthermore, in the main, the HFT companies we followed ethnographically trade in US
Treasury bonds and index futures, while the practices in other markets might be somewhat
different. In spite of these caveats, we believe that our data points to widely held notions of
what constitutes the ideal HF trader. Where observations appear exceptional, we have either
filtered them out or noted their seemingly exceptional character in the analysis.
In the analysis below, our two sources of data are treated as one, i.e. content-wise we do
not differentiate between them, although it will be clear to which source we are referring.
We do not analyze interviews/observations and ‘how to’ books separately because, despite
certain stylistic differences (some ‘how to’ books tend to assume a somewhat paternalistic
language), there are greater overlaps than differences between the two in terms of their por-
trayal of the ideal HF trader.
4. The math- and computer-savvy trader

Some of our interviewees who now work as financial technology providers had previously
been pit traders. One described how he had been recruited for pit trading due to his stat-
ure—he used to play American football and had a physique that was hard to ignore, making
him more likely to be seen and heard in the pit. In an era of HTF, such physical attributes
are no longer valued (see also MacKenzie, 2015a)—although, in fact, they have not been
appreciated for many years. As Zaloom’s ethnography of electronic trading rooms makes
clear, the transition to click/screen trading created a demand for a new set of nonphysical
skills. The firm she followed implemented a deliberate strategy aimed at replacing those best
suited to pit trading with university graduates, specifically ‘recruits who worked with
aplomb under pressure, were “dogged,” ambitious, and had decent math skills’ (2006,
p. 84). These are also skills that are deemed desirable by HFT firms. However, they also
now demand other qualities. Basic mathematical competence is today a minimal,
5 Indeed, as one anonymous reviewer suggested, following their own empirical investigation of HFT,
‘trader’ may simply be seen as the sexier title!
understated requirement. In addition, the ideal HF trader should, in the words of one inter-
viewee (himself a HF trader), be ‘very computer proficient in terms of using analysis lan-
guages’ and ‘able to code’—indeed, be a ‘savant-like type’.6
The emphasis on the math- and computer-savvy trading subject is a description of the
ideal HF trader that is articulated not just by interviewees, but also in ‘how to’ manuals.
Many such books explore software solutions particularly suited to HFT, with some manuals
discussing the pros and cons of different programming languages often used by HF traders,
such as C þþ and Java (e.g. Durbin, 2010, pp. 108–111; Ye, 2011, Ch. 13). There is also a
focus on the technological infrastructure needed to implement HFT. Reflections on infra-
structure include considerations regarding co-location, and whether the CPU (central proc-
essing unit) of one’s computer could be offloaded by processing HFT simulations on the

GPGPU (general-purpose graphics processing unit) (Durbin, 2010, pp. 114–119, 123–125).
All of these are presented as need-to-know aspects of HFT, and therefore as something that
would also define the successful HF trader.7 In other words, it is virtually impossible to con-
ceive of HF trader subjectivity as decoupled from this type of technological knowledge.
What this suggests more broadly is that the ideal HF trader subject is defined by new
types of expertise. One kind of expertise that is not really needed is that of market funda-
mentals—the HF traders we observed only had a general interest in market developments.
They were not concerned with how a company performs in real economic terms, how its
revenues are developing, who is its CEO, etc. Again, this is similar to the kind of click/screen
trading Zaloom studied, where ‘deep knowledge of the financial products was not necessary
to trade successfully. [. . .] a good trader has mastery of the techniques of speculation’ (2006,
p. 85). What is different in an HFT setting is that such speculation techniques are primarily
driven by mathematics, statistics and computer science. For example, it is considered crucial
to be able to write efficient code, in which unnecessary elements are eliminated, as these
increase computer-processing time (and thus order-execution time) and limit the ability to
swiftly correct a malfunctioning algorithm.
The different qualifications of click/screen and HF traders materialize in different types
of behavior. In the trading room we observed, the team included both click/screen traders
and HF traders. The click/screen traders were located at one end of the room, and while
trading they would vocally convey their interpretation of the market movements to the
6 HFT-dominated markets are gendered, since the vast majority of HF traders are male. Also, some of
the HFT offices we have seen have striking similarities with common images of a rather messy
(shared) bachelor’s apartment, containing several computer screens, Coca-Cola bottles, a pinball
machine or similar kind of leisure device, a couch—and no flowers. While there is certainly room for
a discussion of the gendering of HFT, we will leave this aspect aside in this article. For discussions
of gender and finance, see instead Maltby and Rutterford (2012) as well as McDowell (1997, 2010),
though none of these studies address HFT.
7 In fact, some of the technological parts can be outsourced. Firms exist that provide entire packages
of infrastructure to start-ups, including access to fiber-optic cables and co-location via their servers.
The price for a medium-level package is around USD 2 000 per month. Similarly, licenses are avail-
able for advanced software that provides easy-to-use solutions, meaning that one can in principle
become an HF trader without strong programming skills. Mathematical skills, however, are generally
considered a must-have, and are both more difficult and more risky to outsource. As one ‘how to’
manual puts it, ‘[i]f you get the math wrong in this game you are just dead. And there is a mountain
of it’ (Durbin, 2010, p. 96).
whole office. One trader in particular was very emotionally expressive, screaming and wav-
ing his arms in excitement or anger. The tone between the click/screen traders was rough
and rather testosterone-charged, similar to that described by Zaloom (2006, p. 123) and
Knorr and Bruegger (2000, p. 159). In contrast, the HF traders would mostly stay silent.
They would look at each other and laugh once in a while, but never initiate a joke. The calm
atmosphere surrounding the HF traders is tightly linked to the research-based ethos they
bring to trading. About one-third of our HF trader interviewees have a PhD in physics, engi-
neering or mathematics (see Table 1).
This research background produces a highly disciplined work ethic that showcases a dif-
ferent approach to that of click/screen traders. Some of the click/screen traders portrayed in
Zaloom’s ethnographic study would have a lax attitude toward working hours. One would

often come in only afternoon and leave a few hours later, having quickly reached their target
profit (2006, pp. 87–88). This suggests that, to the extent permitted by the company’s policy
regarding physical presence in the trading room, click trading is an activity that can be car-
ried out in brief intervals, and that a successful click/screen trader need only trade intensively
for a couple of hours a day in order to sustain a fair standard of living. One might suspect
that the transition to HFT would further reduce the working hours of a successful trader—
after all, one might speculate, once programmed, the algorithms do the actual trading, leav-
ing even more leisure time for the trader. However, the opposite is the case. The HF traders
working in the HFT firm we followed would come in around 5:00 am or 6:00 am at the lat-
est and go directly to their trading desk. Once plugged in, they would carry out their two
main and constant tasks: (a) monitoring the algorithms that are already running, and (b)
developing new algorithms—and this would go on continuously for hours.8 In fact, HF trad-
ers specializing in the futures market must contend with the fact that this market is open
23 hours a day. This means that there is a constant need for monitoring. One HF trader
explained that he would never sleep more than 4 h a night, but the time reserved for sleep
would be interrupted every 45 min when he would check his algorithms.
However, monitoring algorithms is not the only ongoing task. According to the traders
we followed, an HFT algorithm is often profitable only for about 3–6 months, meaning that
traders constantly have to develop new algorithms, which requires concentrated analytical,
research-based work.9 Most HFT algorithms can be divided into three main categories: (a)
market-making, which is about buying/selling an instrument and then selling/buying it at a
8 Zaloom describes how the transition from pit to click/screen trading gave rise to tensions among
these different trader types, with the former expressing a fear of being run over by the latter (2006,
pp. 66–72). The fact that the firm we followed had both click/screen and HF traders produced simi-
lar types of tensions. In the eyes of the click/screen traders, the HF colleagues appeared (over)
serious, quiet and rather mysterious. This led to some suspicion on the part of the click/screen trad-
ers, who asked each other over drinks at night ‘Why are they here? Why did [management] bring
these guys onboard? They could just fuck us all over!’ The click/screen traders felt increasingly
excluded from participating in the market because of these faster HFT participants who could exe-
cute thousands of trades before they could even make a single click by hand. At the same time,
they looked up to the HF traders. Speaking about an HF trader colleague, one click/screen trader
said, ‘I could never do what he does. I simply don’t know the complicated math stuff’.
9 The code is proprietary to the person who develops it. The traders are highly protective of the
access to the codes. One interviewee, a technician (software developer) who works as a consul-
tant for the HFT industry, explained that even when he was paid to solve a software problem for an
Table 1. The educational background of our HF trader interviewees
Educational background Physics Mathematics Computer Science Engineering Finance

(field and level)
PhD 2 1 1 4†
MSc/MA 1 4‡ 1 2§
¶
BSc/BA 2 2 2
Notes: The table indicates the number of interviewees divided by educational field and level. Several interview-
ees had more degrees. The table lists the highest degree. Specializations and degrees in other fields are mentioned
in the notes.
†
Two of these are specialized in electrical engineering.

‡
One also had a BA in Mathematics.
§One also had a BSc in Computer Science.
¶One degree is in ‘mathematics and computer science’.
better price; (b) scalping, which exploits arbitrage opportunities in a single instrument across
exchanges; and (c) spreading, which profits from identifying arbitrage opportunities between
correlated instruments across exchanges. Such strategies are not unique to HFT (see, e.g.
Zaloom, 2006), but they manifest differently in HFT—partly because they are executed at
extreme speed, partly because the algorithms that execute these strategies are linked to one
another in interactive feedback loops. An HF trader may therefore have market-making,
scalping and spreading strategies running simultaneously, with an algorithmic setup that
ensures that the strategies constantly adjust themselves to price changes in the order book
and to one another (Easley et al., 2013; Lange, 2015). It is indicative of the high complexity
at stake, as well as of the disciplined work ethic needed to succeed, that some HF traders
have hundreds of algorithms running at once. Emphasizing their unique and personalized
approach, the HF traders explain that it is important to build their software system, their so-
called ‘black box’,10 from the bottom up—it cannot simply be inherited from someone else.
In the words of one HF trader, ‘[w]e did everything bottom up, because when you’re dealing
with microseconds and [. . .] nanoseconds [. . .] [y]ou need to be able to open up every [single
algorithm]’. In other words, it is important to have a clear, structured overview of the black
box in order to be able to quickly respond to changes in the market microstructure (e.g. new
exchange fees, new order types, new opening hours, etc.), new regulations or new market
actors, and also because the black box consists of both older and newer algorithms operat-
ing together. HF traders explained to us that a ‘grown up’ well-functioning algorithm needs
intervention (code revision) about every second week. Newly developed algorithms need
constant attention.11
HFT firm and had signed a nondisclosure agreement, the HF traders still would not allow him to
access their codes, even though they knew that he could find them in the log files.
10 Each algorithm is an entity performing a task, while the black box is a group of task-performing
entities.
11 HF traders would always check their algorithms for programming errors. In addition to that, they
would back-test the algorithms against historical market data. However, due to the interactive feed-
back looping of algorithms, back-testing is no guarantee that an algorithm will work well when sent
to operate ‘on its own’ in the market.
To summarize so far, our interviewees and the ‘how to’ literature portray the ideal HF
trader as a math- and computer-savvy subject who submits to a highly disciplined, research-
based work ethic. This image suggests that, while extreme commitment is central to HF trad-
ers, emotions are more or less absent from HFT. As the following sections will demonstrate,
that is not quite the case.
5. Bracketing emotions through algorithms

The calm, disciplined, almost machine-like approach of HF traders constitutes a bodily
enactment of the ways in which computer algorithms are believed to be a rational response
to (and replacement for) the kinds of errors that humans are purportedly prone to make—a

view widely articulated by HF traders and ‘how to’ books alike. Indeed, as we shall shortly
illustrate, HFT and other forms of algorithmic trading derive a crucial part of their legiti-
macy from their alleged superiority over human individuals when it comes to the efficient
execution of orders. While humans are sometimes portrayed as fickle, easily swayed by emo-
tions and susceptible to following crowds, algorithms are often seen as a means of ensuring
rationality in markets (Narang, 2012; Vaananen, 2015). Several sociological studies have
demonstrated that emotions do indeed play a central role for traders, and in financial mar-
kets more broadly (e.g. Pixley, 2004; Preda, 2009, Ch. 8). For example, Jean-Pierre
Hassoun (2005) has shown that emotions—in the form of excitement, outbursts, panic,
etc.—are (were) part of the everyday life of trading floors. This echoes observations on click/
screen trading by Zaloom (2006, pp. 105–106) and Knorr and Bruegger (2002). According
to the latter, click/screen traders ‘are strongly, even obsessively, engaged’ with the market-
on-screen, and joy, excitement, and loss-triggered terror are central components of their
‘emotional engagement with the market’ (2002, pp. 162, 176). It is often believed that algo-
rithms can remove this emotional dimension from trading activity. One ‘how to’ book puts
it as follows:
An important part of algorithmic trading is that it takes out the human emotional aspect of trad-
ing. Trading decisions made by algorithms are based solely on the data analysed and not the
whims, fear and greed of an individual trader. (Vaananen, 2015, p. 210)
A similar point is articulated by HF traders. They too argue that algorithms are free from
human susceptibility to emotions and irrationality, and as a result algorithms are often
described as a rational bulwark against allegedly irrational crowd and herd behavior in mar-
kets. In the words of one HF trader we interviewed:
Human beings are naturally trend followers. If the market is selling off, they start panicking and
do what everybody else does. But that’s not what machines do. What machines do is they’ll say,
‘Okay, historically, when everybody else is selling, it’s more profitable to be a buyer’. Because
that’s what the data says. So machines are not emotional. They don’t really care. They can be
preprogrammed so that if they hit a stop-loss then they can stop trading. But that’s not an emo-
tional decision. Very often, [human] traders may have a stop-loss too, but they might ignore it
because they are emotional and they don’t want to go home losing money. So they’ll keep trading
and just get wiped out.
Similarly, another interviewee (a former HF trader, now manager of a HF trading room)

stated that ‘machines never disobey their rules and their rules are more intelligent because
they are not arbitrary, they are not based on emotions [. . .], they are based on what the data
says you should do’. A central motivation for HFT, therefore, is that it can exclude or mini-
mize incorrect decisions or human biases that stem from irrational and contagious emo-
tional responses. Such human flaws might not lead directly to a loss, but they do
compromise the consistency of the trading strategy and as such may lead to greater risk-
taking. In the words of another HF trader:
I like the quantitative, very computer-based approach. Get rid of the emotion, you know. If you
lost [. . .] money yesterday, you might be pushing more to make it up. A computer program never
pushes to make up for an error from yesterday. If it lost money yesterday, it’s not taking more
risk to make more money. It’s going to take exactly [the risk it is programmed to].

Such views are strongly held and commonly heard among HF traders, and also articu-
lated in ‘how to’ books (e.g. Narang, 2012, pp. xv, 20, 148). The principle is that the trader
is more likely to be successful if he or she acts indirectly in the market via algorithms. This
more distanced approach supposedly prevents emotions from interfering in the trader’s
work. And yet, as our interviews and observations demonstrate, in practice it is not possible
to live up to the promise of eliminating emotions through algorithms. Indeed, HFT introdu-
ces a new set of emotional challenges, which testifies to the ubiquity of emotions in financial
markets (e.g. Pixley, 2004; Zaloom, 2006, p. 54). For example, HF traders must confront a
challenge also faced by pit and click/screen traders—namely losses and how to deal with
them. In fact, according to one HF trader interviewee, it is not only losses that can trigger
emotional responses that must be kept in check, but profits, too:
I try not to get too happy on a winning day. I try to temper myself in both directions. When it’s a
losing day, it’s very much part of the strategy. So I try as much as possible not to let myself expe-
rience the emotional swings.
So while algorithms may not be susceptible to emotions, the HF traders who program
and monitor the algorithms may well be. The challenge they face is therefore to establish a
form of subjectivity that avoids adjusting the algorithms on the basis of fluctuating emo-
tions. The traders we interviewed argued that if the algorithms are fully developed, they
should in most cases be left untouched to do their work. In the long run, that would be bet-
ter than submitting to emotionally induced inclinations to change particular parameters.
The necessity of keeping calm is widely recognized. Interestingly, this applies both when
markets are open and when they are closed. Not dissimilar to Zaloom’s (2006, p. 137)
observation of how click/screen traders struggle with low-activity markets, one of our inter-
viewees, a futures HF trader, described how, in the hour during which the futures market is
closed, traders train themselves not to ‘overreact’. Specifically, the trader explained how he
struggles to keep calm in this period, and how he would often leave the computer so as not
to ‘overadjust’ the algorithms by changing values or risk parameters. Indeed, he said, the
desire to adjust the algorithms, while knowing that this may reflect a short-term emotional
impulse, means that ‘that hour can be emotionally complex’.
Emotions do not therefore disappear from traders’ everyday work life with the transition
toward automation and HFT. The technological changes merely shift the focus from avoid-
ing emotions that interfere in traders’ direct engagement with markets to evading their inter-
ference on the algorithms. As a result, the ideal trading subjectivity that emerges here is
concerned with retaining the detachment to markets produced by algorithms. Algorithms

are the mediating link between HF traders and the market. Letting emotions interfere in the
algorithms threatens this detachment-though-mediation, and thereby also the gains in
rationality and predictability that algorithms are supposed to yield. As the next section will
demonstrate, particular forms of discipline are mobilized to ensure this detachment.
6. The quest for discipline

Obviously, there are different ways of dealing with emotions and eliminating their potential
interference. Similar to Zaloom’s findings with respect to pit traders and click/screen traders,

it is widely held that discipline as a self-technique is the key to preventing emotional interfer-
ence in HFT algorithms. However, precisely how this discipline is to be exercised is a more
complex matter—and what we see in the HFT domain does not fully overlap with the four
key techniques Zaloom identifies. For example, different manuals recommend varying
approaches. According to one ‘how to’ book:
[T]he emotions can be eliminated by strict discipline—following the rules of the system without
question, without fail. This discipline takes time to develop, especially if you are trading only one
strategy. Your tendency will be to watch that strategy carefully, think about it often, and inevita-
bly ponder overruling the strategy. My advice in this case is to trade multiple strategies if you
can. Once you are trading three or more strategies, it becomes hard not to follow the rules. This
is akin to a serial liar, who tells so many lies to so many people that eventually the truth comes
out. You’ll get so confused by what you are actually doing and what you should be doing that
just following the rules will be much, much easier. (Davey, 2014, p. 192, italics in the original)
What is interesting here is that an overload of complexity becomes the means by which
to avoid emotions and ensure discipline. So while confusion might otherwise be thought of
as triggering an emotional response, it is presented here as a deliberate strategy for keeping
emotions at bay. However, reliance on confusion and complexity is not a universally
accepted strategy. Other manuals propose to eliminate emotions—‘these psychological
weaknesses’, as Chan (2009, p. 111) calls them—by proceeding very slowly, only incremen-
tally adding complexity to the algorithmic strategies:
As with most human endeavors, the way to [overcome emotions] is to start with a small portfolio
and gradually gain psychological preparedness, discipline, and confidence in your models. As
you become emotionally more able to handle the daily swings in profit and loss (P&L) and rein
in the primordial urges of the psyche, your portfolio’s actual performance will hew to the theoret-
ically expected performance of your strategy. (Chan, 2009, p. 111; see also Leshik and Cralle,
2011, p. 30)
Interestingly, as already mentioned, mobilizing discipline in response to perceived market

emotions is not unique to HFT. As Urs St€aheli has demonstrated, discipline as a particular
individualizing technique for traders dates back at least to the so-called contrarian invest-
ment thinking of the 1920s and 1930s (St€aheli, 2006; 2013; see also Hansen, 2015). Led by
‘Vermont Ruminator’ Humphrey B. Neill, the contrarians asserted that financial markets
are characterized by the same traits attributed to mass gatherings by late 19th-century crowd
psychologists such as Gustave Le Bon (1960)—namely irrationality, suggestibility, height-
ened emotional intensity, impulsiveness and de-individualization (see also Borch, 2007,
2012). Based on this diagnosis, Neill developed the notion of contrarian speculation: if mar-
kets are irrational, and if they threaten to seduce the investor into following the market
crowd—and hence capture him or her by means of contagious market irrationality—then
the only rational and intelligent way to invest would be to do the opposite of whatever the
market crowd does (hence the notion of contrarian speculation).12 Enacting this contrarian
strategy required a number of self-disciplinary techniques, some of which are strikingly simi-
lar to those found in today’s HFT literature and in our interviews. For example, Neill
emphasized the importance for the contrarian investor of ‘attaining a mastery of himself: of
his temperament, emotions, and the other variables that go to make human nature’ (Neill
quoted in St€aheli, 2006, p. 416, n. 449).
According to the contrarians, one way of resisting the hypnotic spell of the irrational

market crowd was to combine physical attachment to a market with partial mental detach-
ment. This could purportedly be achieved by writing down market events. ‘Use pad and pen-
cil since it will occupy your mind and concentrate your attention’, Neill recommended. ‘Try
it, you will never be able to chatter and keep track of trades at the same time’ (Neill quoted
in St€aheli, 2006, p. 286). As St€aheli notes, this recommendation:
articulates two very different purposes: it combines the permanent observation of the market
with the individualization of the speculator. Writing is presented as a technique to keep from los-
ing oneself within the noise of the marketplace and the never-ending circulation of rumors and
tips. (2006, p. 286)
Since HFT, qua its computerized-algorithmic base, by definition operates in the medium
of writing (a significant part of HFT consists of writing one’s code as efficiently as possible),
the individual HF trader is in a different situation than his early 20th-century contrarian
counterpart. In itself, writing is not a means of eliminating emotions. In fact, our interview-
ees reported that writing code can create new forms of unwanted emotional attachment. In
the words of one HF trader:
You get attached to the algorithms that you have developed. Like, if you see that it’s not working
as you expected it to, you want to make it work. You know, rationally, it won’t. All the science
tells you it won’t. But still you think, ‘If I can tweak it a little bit it might work’.
Another HF trader described the attachment to algorithms as follows:
You are compelled to let [the algorithm] run longer [than is rational]. [. . .] You do feel this per-
sonal attachment to what the algo is doing, because if you write something from scratch you feel
like you are acting indirectly through the algorithm. So when it is doing a trade, you know what
it was thinking when it made that trade. It is sort of an extension of yourself in that way. [. . .] I
see what it is doing and I think it is smart, because I programmed it to be smart. It’s like people
taking pride in their child’s accomplishments.
Such attachment is underlined by the fact that many of the HF traders we talked to gave
their algorithms semi-personal names (e.g. ‘Daddy Fat Slack’). This personalization of the
12 As Hansen (2015) notes in an analysis of the rise of contrarian investment philosophy, Neill did not
coin the term contrarian speculation until 1954, but the basic idea of investing against the market,
and mobilizing crowd psychology for this endeavor, emerged in the 1920s.
algorithms, as well as the HF traders’ inclination to see them as extensions of themselves,

once again raises the challenge of how to ensure that emotions do not intervene in the algo-
rithms. How, in other words, can one avoid emotional attachment to an algorithmic setup
that aims to ensure rational detachment from the market? How to instill discipline vis-a-vis
an algorithmic attachment?
One recommendation is to create distance to the algorithms through a closer focus on
the strategies. For example, one HFT manual emphasizes the importance of determining
when to stop trading a particular strategy. This may include defining particular metrics,
such as the extent of a loss one is willing to take during a given period, or how many
‘[c]onsecutive losers in a row’ one is willing to incur (Davey, 2014, p. 191). In any case:

The exact condition you select probably is not as important as writing it down and sticking to it.
That is the key. It needs to be solid, definitive, and written down. Ideally, you’ll also tell your
spouse or a friend, too, since it is harder to back out when you make the proclamation public.
(Davey, 2014, p. 191)
Two points are important here. First, contrary to other ‘how to’ literature, in which the
central point is often change (see e.g. the analyses of self-help literature by Bröckling, 2005;
Salmenniemi and Vorona, 2014), the core to success in HFT is presented here as stability,
i.e. adherence to one’s strategy. Second, while none of our interviewees seemed to follow the
advice of disclosing their strategies to significant others in order to impose normative con-
straint on themselves, they did emphasize the need for consistent strategies. In a similar man-
ner to the contrarian recommendations mentioned above, the HF traders we followed
would often refer back to a handwritten document in which they defined the basics of their
strategies. They used this document to ensure consistency in their strategy and as an expli-
cated means of helping them assess whether they had deviated too far from the original
plan.
Indeed, HF traders often emphasize the importance of consistency of strategy. They are
not simply content with winning trades—a winning trade is only satisfying if the trader can
trace it directly to his strategy. To take on a winning trade without knowing what triggered
it might be an indicator that the strategy is not consistent, a possibility that was profoundly
troubling to the HF traders we followed and interviewed. This points to a significant shift in
trader subjectivity compared to Zaloom’s findings. The university graduates among the
click/screen traders she followed struggled to embody the direct, intuitive approach to the
market that characterizes successful trading behavior in which the trader is fully absorbed in
the market. Their problem was that, due to their university background, they would often
be too ‘calculative’ or ‘consider situations too closely’: ‘Calculations or elaborate strategies
that take them out of market time are seen as an impediment’ (2006, p. 138). Accordingly,
the key advice given to the click/screen traders in Zaloom’s study was, ‘Don’t think’ (2006,
p. 138). By thinking less, the click/screen traders would be more attuned to the speed of the
market.
For the HF traders, this is all rather different. They emphasize the need to replace intu-
ition with strict calculation. Interestingly, this gives rise to a paradoxical inversion of time
horizons. While the click/screen traders are encouraged to think less in order to attend care-
fully to their ‘second-to-second timeframe’ (Zaloom, 2006, p. 138), the HF traders, whose
algorithms operate in timescales beyond human perception, in fact define their trading
practice as a ‘long-term approach’. Their strategies need to be highly systematic and highly
calculative in order to survive for several months—indeed, this is the underlying aim of their
meticulous daily work on the algorithms. Two implications follow from this. One goes back
to Zaloom and Knorr Cetina and Bruegger’s observations of how traders relate to the mar-
ket, and how electronic trading changed this relationship. With the emergence of click/screen
trading, the market was no longer a physical place, as it had been in the pit. Rather, it was
to be found on computer screens. Consequently, click/screen traders must attend to these
screens in order to understand where the market is (moving) and they must attune their ‘sec-
ond-to-second timeframe’ to this on-screen reality. This market-on-screen typology persists
in HFT. HF traders, too, consider the market as a market-on-screen. Yet, what is novel with
HFT compared to click/screen trading is that the relative importance of the market-on-

screen has diminished. HF traders primarily pay attention to their algorithms, visualized as
codes running on their screens. In practice, we have seen HF traders with two sets of screens:
one consisting of three screens displaying market movements and profit and losses (the
market-on-screen); and another consisting of six screens displaying the various algorithms
under construction (the codes-on-screens). Little attention was paid to the former set of
screens, since the focus was on the development of new algorithms. In other words, the HF
traders’ ‘long-term approach’ implies less interest in the conditions on the market at any
given moment, and more interest in developing new profitable algorithms. This further
means that the kind of attachment Knorr Cetina and Bruegger identify in click/screen trad-
ing also applies in HFT—albeit with a twist, since for HF traders, their attachment is not so
much to the market-on-screen, but to the algorithms as they appear as codes-on-screens.
The other implication is that, in HFT, discipline applies both to the trading self and to
the strategies, both of which should be rational and purged of emotions. Perhaps surpris-
ingly, this discipline need not entail that losses are entirely eliminated. Similar to winning
trades, losses are acceptable, as long as they are part of a strategy. In the words of one HF
trader:
periodic losses are part of a long-term strategy. They were part of the strategy when I was plan-
ning it. The idea is to keep them small and frequent but regular, that’s fine. If they are regular
and if they are predictable, that’s even better.
One aspect of the strategies, their risk component, is often mentioned by HF traders as
posing particular challenges to trading discipline. Every strategy is tied to a specific level of
risk—and of course, as is also the case in other forms of trading, ‘a faulty model can lead to
massive losses’ (Beunza and Stark, 2004, p. 392). However, what is of particular importance
to HFT is that the strategies also operate on a particular scale and often cannot be scaled up
(i.e. to make bigger trades) without increasing risk exponentially. The reason for this is that
strategies based on smaller trades typically leave only a small imprint on markets, something
that renders it possible, within certain limits, to back-test the impact of such strategies
against historical market data. Bigger trades, on the other hand, tend to leave visible market
footprints, meaning that strategies based on bigger trades are much more difficult to back-
test, and hence extremely risky. Several interviewees expressed that this is a crucial technical
issue that is sometimes lost on management. The ability to defend lower-risk strategies is
therefore a necessary part of the ideal HF trader’s repertoire. In fact, several HF traders
described how they would occasionally find themselves in the midst of conflict between, on
the one hand, defending the scale and risk level of a particular strategy they had developed
and, on the other, pressure from management to scale up that strategy, with potentially
huge implications for the risk level. One HF trader explained that he eventually resigned
from a trading firm:
because the strategy that I was slowly introducing to the market would do so well [that manage-
ment] wanted me to put more risk behind it. [. . .] They wanted me to do it earlier than I was com-
fortable with and they didn’t understand the risk that that entails. You know, the risks are
infinite, technically.
This suggests a stark difference to the risk-taking practices of pit traders. According to

Zaloom, for pit traders, ‘[t]he consequences of taking risks evoke excitement and complete
absorption into the action’, not dissimilar to the ‘experience of mob violence’ (2006, p.
105). While risk-taking obviously cannot be eliminated from HF trading, traders approach
it with great caution and with the systematic research ethos that generally characterizes their
work. Indeed, the ideal risk-taking HF trader is portrayed as one who subscribes to pruden-
tialism—in other words, the idea that ‘the rational and responsible individual will take pru-
dent risk-managing measures’ (O’Malley, 1996, p. 200), and who does so through back-
testing and incremental advances.
What we have demonstrated in this section is that, while discipline remains at the core of
successful trading subjectivity across different market configurations (pit trading, click/
screen trading, etc.), discipline and techniques of the self take on new forms in an era of
HFT. It is helpful to return to the four main techniques of the self that Zaloom identified,
and see how they are affected by the shift to HFT:
(1) Traders separate their actions as traders from their outside lives: this is also the case in
HFT, although it is not heavily emphasized;
(2) Traders seek to control the impact that losses may have on trading behavior: as men-
tioned, losses are (not unlike Zaloom’s study) considered an integral part of the trading
strategy, something hardly avoidable, but which requires management. But more than
that, in HFT losses should also be explainable (preferably, predictable) on the basis of
the strategies and algorithms that traders deploy;
(3) Traders attempt to break down narratives of success and failure in order to treat each
trade in isolation: in HFT, in contrast, there is a comparatively greater focus on seeing
no trade in isolation. The whole point of HFT strategies is to trade on the basis of con-
sistent patterns, meaning that trades relate closely to past trades;
(4) Traders learn to become fully absorbed in the market: in HFT, market absorption is not
the goal. Quite the opposite, market absorption is seen as an indicator of the HF trader
having an excessively lax, noncalculative attitude to the market. Rather, absorption
exists in HF traders’ emotional attachment to their algorithms, but this, too, is an
absorption they seek to curb.
In addition to these points, but following closely from them, prudent risk-taking is seen
as a central element of HFT techniques of the trading self. Since HFT algorithms are operat-
ing at extreme speeds, it is crucial that their risk profile is correctly identified. Finally, in all
of their work, HF traders follow a systematic, research-based ethos.
7. Conclusion
This article has analyzed how the rise of HFT has reconfigured the ideal trading subject, and
how such a subject is portrayed by interviewees, in our ethnographic study of HF traders,
and in ‘how to’ HFT books. Our analysis does not lend support to any kind of technological
determinism, according to which the rise of HFT produces a type of trader subjectivity that
is completely different from its pre-HFT forms. Rather, it has been important for us to stress
that, while the computerization of financial markets intrinsic to HFT certainly does confer
importance upon new sets of trader skills and competences, there is also a range of central
continuities that link HF traders to their pre-HFT colleagues. In other words, particular
aspects of trader subjectivity—in particular, dealing with emotional attachment through dis-

cipline—seem to be inherent to trading, regardless of the technological environment in
which it takes place. Extending this further, it might even be argued that whenever people
are confronted with action under uncertainty, it is not uncommon for a disciplined approach
to endorse adherence to predefined strategies, such as is recommended in the HFT domain.
This suggests that what we have identified for idealized HF trader subjectivity might be
found not only in other types of (pre-HFT) market configurations, but equally beyond finan-
cial markets, in e.g. sports, warfare or poker (for a similar type of argument, see Lee and
Martin, 2016).
It is beyond the scope of this article to speculate in any detail about possible connections
between HF trader subjectivity and disciplining techniques outside of the realm of finance.
Yet, to better allow for such comparative work in the future, it might be helpful to summa-
rize what we consider the most central traits of HF trader subjectivity—traits that, all above-
mentioned similarities aside, delineate how the ideal HF trader subjectivity differs from the
characteristics of its pre-HFT counterparts. To begin with, from an organizational point of
view, HF trader subjectivity is distributed across developer, programmer and financial ana-
lyst positions, thereby effectively dismantling the former separations between front and
back-office staff. Furthermore, the ideal HF trader is characterized as a computer- and
math-proficient, savant type who embodies a research-based ethos. This endows the work of
the ideal HF trader subject with a certain slowness compared to the direct, rapid-firing com-
petence required by both pit and click/screen traders—what we have referred to as a para-
doxical inversion of time horizons. In addition, one of the specificities of HFT is that the
very engagement with algorithms reconfigures the problem of emotional attachment/absorp-
tion and disciplinary detachment that is otherwise shared by pre-HF traders. In particular,
we have described how HF traders develop an emotional attachment to the algorithms they
create and the code they write, and that their daily work is more geared toward interacting
with their technological black-box system than with the market as represented on screen.
This suggests that, while emotional attachment remains an important challenge for traders
in the HFT domain, their center of attention (and attachment) shifts. So too does the discipli-
nary response, as illustrated by the fact that complexity (the interaction of multiple strategies
and algorithms) is seen as a way of enforcing discipline—the point being that further calcula-
tion becomes a means with which to ensure the stability and consistency of the trading
strategy.
As mentioned in the introduction, the rise of HFT is partly a result of a technological rev-
olution of financial markets, which itself must be understood in the context of broader tech-
nological developments in society. In a similar vein, our analysis of HFT also prompts
questions for broader debates about, e.g. financialization. Discussions of financialization

point to how finance has come to increasingly dominate everyday life, including the ways in
which subjects understand themselves (e.g. Krippner, 2005; Van der Zwan, 2014). In other
words, the financialization literature shows how the economy, or particular aspects thereof,
is reformatting society. The rise of HFT adds nuance and complexity to this relationship
between economy and society. At its core, HFT is not simply a matter of human beings
becoming obsolete in financial markets. Indeed, as our analysis demonstrates, an active level
of subjectivity remains at play in HFT-dominated markets. Rather, HFT is essentially a
market-based instantiation of the near-ubiquity of algorithms in present-day society, i.e. the
algorithmic colonization of ever more life spheres, be it in the form of internet search algo-
rithms (Madsen, 2015); algorithms underpinning smart cities programs (Townsend, 2014);

or algorithms deployed for security and antiterrorism purposes (Amoore, 2011; Amoore
and Volha, 2015), to mention but a few examples. Acknowledging that HFT should not be
seen in isolation from this algorithmization of society prompts salient questions for future
comparative research. For example, how are these different types of algorithmization inter-
related? What types of subjectivity are fabricated across them? What types of attachment
and discipline might be generated along the way? And how does all of this relate to the proc-
esses of financialization—for example, might algorithms change the ways in which financial-
ization will operate in the future? It is our hope that this article, in its exploration of HF
trader subjectivity, will offer a foundation for such comparative work and provide a basis
for better understanding algorithmic attachment and discipline.
Funding
This work was supported by a ‘Crowd Dynamics in Financial Markets’ Sapere Aude Grant
from the Danish Council for Independent Research.
Acknowledgements
We are grateful to Ole Bjerg, Kristian Bondo Hansen, Paul Langley, Steen Vallentin as well as the
SER editors and anonymous reviewers for constructive comments. Previous versions of this article
were presented at workshops in Frankfurt and Copenhagen. We thank the audiences for valuable
feedback. We also wish to thank Thomas Lauronen and Laura Mortensen for research assistance.
Finally, we are thankful to our interviewees for participating and inviting us into their trading
rooms.
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High-Frequency Trader Subjectivity Emotional Attachment and Discipline in An Era of Algorithms

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Socio-Economic Review Advance Access published August 19, 2016

Socio-Economic Review, 2016, Vol. 0, No. 0, 1–24

High-frequency trader subjectivity:

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Key words: financial markets, economic sociology, skills, sociology, USA

JEL classification: G1; Z13

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2. Trader subjectivity, markets and technology

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By modifying their selves in ways consistent with these recommendations, a disciplined

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3. Data and methods

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High frequency trading is a form of automated trading that employs:

We subscribe to this latter definition. However, the lack of a hegemonic definition of

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4. The math- and computer-savvy trader

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Table 1. The educational background of our HF trader interviewees

Educational background Physics Mathematics Computer Science Engineering Finance

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5. Bracketing emotions through algorithms

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Similarly, another interviewee (a former HF trader, now manager of a HF trading room)

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concerned with retaining the detachment to markets produced by algorithms. Algorithms

6. The quest for discipline

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Interestingly, as already mentioned, mobilizing discipline in response to perceived market

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Another HF trader described the attachment to algorithms as follows:

algorithms, as well as the HF traders’ inclination to see them as extensions of themselves,

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questions for broader debates about, e.g. financialization. Discussions of financialization

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