There is justification for making a trade quickly, but there is no justification for getting in and out and in and out and in and out, etc. quickly.
The easiest solution to me is to either place a small tax on all transactions or a large tax on multiple transactions of the same security. I hate taxes, but I don’t know how else to stop this obscene wealth transfer to whoever has the fastest trade platform and best algorithm.
Sorry, I can’t agree with you on this. Why someone buys or sells, or how often, is their own business. If you’re a buy-and-hold investor, then you should be looking to buy stocks at a price you think will allow you to sell at a profit later. If you think these high-frequency guys are driving up prices, making you pay more, then aren’t those same guys keeping prices up, making it more lucrative when you sell? Or aren’t people that are selling today getting a higher price than they would without the HFT’s?
The reality is that we used to pay 6- to 10-cents PER SHARE to trade, and bid/ask spreads on NASDAQ or OTC stocks were 1/16th (6.25-cents) or 1/8th (12.5-cents). Now just about anything you want to buy can be had for flat-commissions, and bid-ask spreads are a penny or less. That’s because the HFT guys are doing with computers what floor brokers and retail brokers used to do all the time. They just do it more quickly, efficiently and cheaply.
If you’re an investor, then these guys have virtually no impact on your long-term returns, and maybe even help them, because the market is priced more efficiently by their presence.