High Frequency Trading (HFT) seems to be the big money making mystery machine these days. The purported source of unlimited floods of gelt pouring into the investment shops using it.
For me, HFT is first of all nothing else but trading on a different (i.e. ultra short) time scale. You can make a fast buck, but you can also ruin yourself within seconds. Fast doesn't mean smart, right!
There are not too many players there at the moment so markets are not completely efficient? Fine but the players that are there are the best quants with the finest pieces of technology available on this planet.
What is the biggest differentiator of HFT at the moment (apart form the fact that it is faster)? What can you do here to outperform what you can't do on other time scales? Or is it just like it is with all the other time scales: A few winners and many losers (survivorship bias)? In short: Does quantity turn into quality because it is faster - and if yes, when and why?