1. Trading instructions are completely sent by computers, and the response delay to market data is in the microsecond level (VBA attenuation).

2. The system is composed of special software and hardware, and a lot of computer experts are needed in the research and development process.

3. The hardware of the system needs to be placed near the exchange host, which is called co-location. And get a special access permit, and the trading instructions are sent directly to the exchange (not through brokers).

There is still a handling fee for high-frequency trading. Although the income of each transaction is low, due to the high frequency of transactions, the income is also considerable, but in fact, high-frequency transactions do not necessarily make money.

1, there are indeed high-frequency transactions to make money and a lot of losses. Because the high-frequency trading system is sensitive to low latency, it needs to invest a lot of manpower and material resources in research and development, hire professional computer experts with high salaries, spend money on expensive hardware and rent special microwave communication lines. But all this does not guarantee that you will get the expected "low latency" system. The design and development of the whole system is a very complicated project. Moreover, the trading system requires extremely high accuracy and stability. If it is not accurate enough, there will be various problems after it goes online and it can't be used at all. Such a large-scale investment often leads to system defects, and many companies fail at a loss because they can't solve technical problems.

There is a far-reaching problem here. High-frequency trading is a combination of finance and computer, but very few people are proficient in both. The project led by the financial person will lack the ability to judge the technology, while the project led by the IT person will not clearly grasp the demand. This may not be a big problem in industries that are not sensitive to performance. It can be solved in the traditional way of Party A and Party B. If there is a problem, it will be slowly wrangling. But in this highly competitive industry, there is not much time to waste on wrangling. If the system put into production is delayed by a few microseconds, it may be a waste, and at that time, it is often found that there is something wrong with the basic design and there is nothing to do. This extremely difficult research and development pressure is actually the source of high returns.

Note: high-frequency trading is not suitable for ordinary investors.