These signals are being sent with no intention of being filled and are only designed to trick the people who have genuine appetite for risk or an asset that will help mitigate it. This type of preditory HFT behavior is what we are against. There are plenty of very well todo HFT and Algo's runners out there but just like civilian law, the rules are in place because of a few bad apples. If the good HFT could police the bad, like Greenspans macro economy view, we wouldn't have to come out so strong against them. This law-breaking behavior is detrimental to the financial market structure and the trust of the participants. Themis Trading released a new post today that you should read (here) on HFT and crashes. For the proof of this ridiculously pansy ass behavior, read below. Below you will see a chart along with 5 tables from HFT Alert that document the recognition of the sequences. Look at the Trade column and the Count column. Count is quotes sent and trades are, well, trades made. BBO is Best Bid Offer. Try not to get too pissed.
Nanex ~ Algo Testing during trading hours. IMPV on Jan 10, 2012
We have detected algo testing during regular trading hours from multiple exchanges. Several of these exchanges did not previously show a significant level of HFT infestation. The black area is the NBBO. Note how the NBBO of this inactive stock goes from a few cents (and stable), to 25 cents (and wildly unstable). This behavior previously involved Nasdaq, Arca and sometimes BATS. This example shows a high rate of nonsense quotes from no less than 5 exchanges. There were no trades during this event. A few small trades did occur near the end of the event at prices outside the range shown here.
About 43 seconds after starting, it pauses a few times.Zoom 2