High Frequency Traders

Deception has been and no doubt will always be one of the aspects of the market that traders have to contend with. We see it all the time with fake outs at the London opening. Whether machines can cope with these situations better than humans remains to be seen. One disadvantage machines have is their predictability. If they come to dominate the market, their patterns will become known and used to profit those clever enough to decipher them.

In the early days of chess playing robots, average human players would lose at first playing against the machine. But once they figured out the machines’ patterns they could beat them every time. The robots simply couldn’t devise a new strategy to confuse the human. Nowadays, the robots are much more sophisticated and only master level players can beat them. I believe that this is because average human players make too many mistakes while the machine will never make a mistake. Master players make fewer mistakes which puts them closer to the machine’s level. But they still have the human ability to act creatively and deceitfully.

Is HFT harmful? Seems like a good thing to me. Computers trade in patterns like codemeister said.