Here are the facts.
It is not the speed of high frequency trading firms that puts investors at a disadvantage. Their speed is a function of these firms competing with one another. The faster a firm trades the more efficient it is in exploiting the unsuspecting behavior of the public, hedge funds, investors and traders of all kinds.
The only true advantages these firms have is that they are not bound by the constraints of existing securities laws. What we have is the equivalent of making robbery legal for an anointed set of citizens. That happens also, but folks are not aware of it.
No one has stated outright the high frequency trading firms are above the law. They don’t have to. Regulators simply fail to notice. Individual investors are sometimes prosecuted for spoofing. For high frequency trading firms spoofing is a constant trading technique from the open to close of trading.
High frequency trading firms and lawmakers have compatible goals so manipulation is overlooked as long as the result is higher stock prices. This puts all other traders at a disadvantage because they lose all objective criteria for studying price movements. Both fundamental and technical analysis become useless with respect to decision making.
The disadvantage to equity buyers and sellers is obvious. The general public suffers even more but for reasons that are not automatically grasped. Biggest of all are the changes in the incentives that govern the actions of the upper 1%. When all one has to do to get paid is run up the price of owned assets without respect of profits, the rich become lazy. Innovation and effort by the wealthy become highly subdued. Welfare for the rich has the same effect on the rich as it does on the poor. It reduces the incentive to do anything productive.
I mention these things today because we are on the cusp of an era where everyone together will suffer greatly as a result of years of abusing the financial markets. It is important that blame be correctly placed because someone will be blamed regardless.