Suppose that all the high frequency traders were interviewed for a job. I asked them “What are you doing for me, that I should pay you all this money?” They would reply “We’re providing liquidity!” or “We’re facilitating price discovery!” That is nonsense.
The rules of the market favor insiders. If you tried to invest your own money and implement a high-frequency trading system, you will probably fail. Insiders get perks that you don’t get.
The high-frequency traders co-locate servers at the exchanges. Unless you also do that, you have a disadvantage.
The high-frequency traders are usually linked to a big bank. They get to peek at incoming customer orders. The bank can fill the trade from their own account, or send it out to the market. That’s a valuable implied option. Unless you get that perk, you’re at a disadvantage.
Why do stocks need to trade continuously all day? Suppose that each stock only traded once per day. The buy orders and sell orders are matched. If your order doesn’t match the price, you have to wait until the next day. That would be a simpler and more transparent system. That wouldn’t let insiders scalp money off each trade.
If stocks only traded once a day, most trades would occur between two actual customers. Middlemen would only scalp a little.
When stocks trade continuously, most trades occur between a customer and a State middleman. The middleman artificially raises transaction costs, scalping a penny off each trade. Sometimes, the middlemen manipulate prices, further raising costs.
Besides, the stock market is one big scam. As a retail customer, you’re an idiot to buy stocks. Your returns won’t keep pace with true inflation.
High frequency trading has no economic value. It enables State middlemen to scalp money off each trade. With a corrupt monetary system and high inflation, people are forced to invest to protect their savings. The stock market is a huge theft engine, transferring wealth from non-insiders to insiders.