The vast majority of nay sayers of HFT's are 100% bull shit, but they do scare off home gamers. Huge volatility? Hell no you jack ass (referring to the article)!
Great points from the two posts. As a remedy for the stock market battlefield, day trading ETF's and ETN's (careful on the credit of issuers and don't beat your insurance limit of $2.5m) do not have the even winners/losers because the price swings are based on faith in other values. Price movement is due to outside factors, not off of bid/ask tick mini-auctions in company stock.
OK, maybe I'm misunderstanding the situation, but if HFT systems are beating everyone then why and how is that? Are HFT systems acting so quickly that they are arbitrating all the volatility out of the market (i.e is it making it a more efficient market that smaller players can't significantly take advantage of)? There is still volatility so no (if this has significantly changed for this reason it would be interesting to know). Is the profitibilty/risk that others derive from the market not from it's volatility? Also, forgive my ignorance, but has their been proof (not just heresay) that HFT systems have manipulated the markets?
The point is not that they are manipulating markets, they are increasing volatility and systemic risk, and they represent unfair competition against pension funds, individual investors and traditionnal traders ( real HFT are actually not traders they are programmers, for them it's all about beating others in terms of speed and for many as I understand gaming the system) . Now in addition to that which is now starting to be recognized by regulators everywhere, my opinion is ït's not right to make money by gaming the system with technology, the financial markest are about expressing your views and you make money if you get the market direction right , it should not be about devising programs to take advantage of the system. SOES traders took advantage of the system, but 1) they were the underdogs 2) they had skills. HFT have no trading skills other than programming and stats. . Were you watching the markets during the flash crash, well I know because I had started to scale into a long position in GBP/JPY , which dropped more than 10 big figures on that day, somehow I got out with out losses by buying a lot at the bottom, it was Armageddon. Every tick in the S&P drove the direction of currencies , I don't think it used to be like that. One day everything will collapse , and you can thank the HFT traders for that.