Mid-frequency trading (MFT)
Quick definition
Mid-frequency trading (MFT) is a form of algorithmic trading with a time horizon longer than high-frequency trading but shorter than traditional discretionary or long-term strategies.
What is Mid-frequency trading (MFT)?
Mid-frequency trading (MFT) sits between high-frequency trading (HFT) and low-frequency trading. It relies on sophisticated algorithms and data analytics to identify and exploit opportunities that develop over minutes, hours, or days rather than microseconds. Unlike HFT, which focuses on speed and micro-scale market inefficiencies, MFT prioritizes strategy over speed.
MFT strategies often analyze factors such as momentum, mean reversion, and event-driven signals to predict price movements. MFT strategies may also include multi-asset or cross-market approaches, taking into account correlations, volatilities, and macroeconomic trends.
MFT execution is optimized to minimize market impact and take advantage of favorable liquidity conditions, but it does not require the ultra-low latency infrastructure of HFT.