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May be not all, but a good chunk of what you wanted to know about the current state of trading algorithms without reading the book ("How to Make Money in Microseconds"):

http://www.lrb.co.uk/2011/05/19/donald-mackenzie/how-to-make...

What seems important to us humans:

- data we do have suggest, if anything, that automated trading reduces volatility. For example, statistical arbitrage algorithms that buy when prices fall and sell when they rise can normally be expected to dampen volatility.
- The bulk of the research also suggests that automated trading makes the buying and selling of shares cheaper and usually easier.


As long as we do not run into other instances of 'hot potato trading', as happened during last year's flash crash:

One algorithm would sell futures to another algorithm, which in its turn would try to sell them again, in a pattern that the SEC/CFTC investigators call ‘hot potato’ trading.

Leo
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