>> I do not presume to know how you should feel about this. People are routinely worried about harmless things, and routinely completely unworried about incredibly harmful things. What we can say, though, is that to many ordinary people going about day-to-day work involving actual labour of some sort, the concept of a robot trader making 100 trades in the time it takes them to sip a cup of tea makes them feel uneasy. The practice may just seem unnatural, or complex, or out of control, or just weird.
Now, it’s not like these firms all use the same strategies. Some use statistical analysis and arbitrage of various sorts, while others operate exclusively in “market microstructure” strategies, which seem to involve knowing the intimate electronic guts of the exchange systems and how they can be, um, taken advantage of. One might engage in flash trading, which some argue is a form of legalised front-running. You might bludgeon markets with orders through ”order stuffing″ (what HFT whistle-blower David Laurer calls a financial DDOS attack).
You may layer orders across a market like fairy dust, perhaps trying to incite outbreaks of ”momentum ignition“, which appears to be a form of subtle market manipulation. Some have aggressive trading strategies aimed at proactively following trends and taking opportunities, while others might be more passive, like electronic Aikido-bots using minimal exertion of energy. <<