Could you explain that a little more? My understanding, and it's not much, I'll admit, is HFT's traditionally use "quote stuffing" to probe hidden market orders (and trade ahead), or jaw-bone the market, by displaying heavy on one side, even though it's not executable, to get price to move in the other direction?
Whoever posts 100 limit orders to get filled on 1 is a shmuck. It's simple. Enforce a 50 millisecond minimum before pulling/cancelling quotes. It takes 50 milliseconds for the human eye to discern a man from a woman. You mess with that, you mess with humanity.
It takes 50ms for the brain to feel the difference between pain or pleasure. or know the difference between a tranny and a woman. Gaming a system below that threshold is satanic.
No one said you couldn't make money. No one said there weren't new opportunities because of hft. What I've been saying for YEARS , is the blatant, patent, abuse of co location and other 'edges' is not fair to the rest of the trading community. And who says, as one poster bleated, you can't execute against these flash quotes?
I think it is similar to a denial of service attack. If you choose a symbol on an exchange and pump in 50k orders/sec you know ahead of time to ignore incoming quotes from that symbol and exchange. Everyone else has to process the quotes as they appear real. This gives the instigator a small advantage by skipping the processing, and if he further can deduce which other symbols are located and process by the same line/cpu at the exchange, he will have advantage in those other symbols for a brief period of time.
what happened in the old days when the phones rang off the hook? anyone make pretty graphs about that? Like when they played Godzilla over the radio and people really thought the world was about to end - did someone make a pretty graph of the phone lines or the stock market?
How do you know that a billion manual traders didn't get that news off Kramer and all decide to trade that name?