Because of the high frequency of such transactions and often involving package transactions, most of them are realized through programmed operations. Restricted by the system, domestic high-frequency trading is essentially different from foreign high-frequency trading, and domestic high-frequency trading is only a quick intraday trading at most.
In recent years, with the increase in the number of investors participating in high-frequency trading, the competition in this field is becoming increasingly fierce. Whoever grasps the speed faster will take the lead, and the continuous research and development of new models is also the premise to ensure the continuous profitability of high-frequency trading, because the life cycle of an effective model is very short.
There are also risks, which are prone to system failures and objectively have many defects.
First of all, there is nothing wrong with focusing on short-term operation to find the bid-ask spread, but it is still different from the concept of long-term investment and value investment. It is obviously inappropriate to excessively advocate high-frequency trading.
Secondly, high-frequency trading enlarges the trading volume and effectively improves the efficiency of capital use. However, because the flow is purely for speculative purposes, that is, it is impossible to find value or optimize the allocation of funds, it is difficult to have a positive impact on the real economy, and it may not play a role in the normal operation of the stock market. Its excessive proportion is not a good thing.
Third, high-frequency trading needs high technical content, and its own software and hardware investment is quite large, which is bound to be a game for a few people. If the management is not strict, its operation behavior can easily mislead other investors and become a means of law of the jungle. Therefore, how to maintain the fairness and justice of the market while conducting high-frequency trading is always an unavoidable problem. In overseas established markets, high-frequency trading is often criticized by various public opinions, and its scale has also declined in recent years.
Especially after the international financial crisis in 2008, the regulatory authorities in some countries strengthened the supervision of various financial innovative products, including high-frequency transactions. At present, the market share of high-frequency trading is generally expected to decline by about 30%, only about half of the peak period. In China, high-frequency trading is still a new thing, but there are different views from the beginning, especially under the condition of not implementing "T+0" trading, high-frequency trading itself has logical defects.
In the case of relatively limited market capacity, its operating space has also been questioned. If we blindly promote high-frequency trading for a utilitarian purpose, it will only bring unpredictable risks. There are also many examples of powerful institutions and companies failing in this respect, and it is not recommended to do so at present, so the recommendation of the company is not appropriate.