Nothing stated here is hyperbole, it is simply a description of technology, human greed and human psychology, very basic stuff really.
If you do not think that crime syndicates are trawling the bourse then you are somewhat naive, though you may be technically proficient.
As I have pointed out in the article above, even many legal businesses are being fined for the ways they are devising of making profits using electronic technology, and in fact, Goldman Sachs in New York now employs more algorithmic software professionals than traders.
Unfortunately, those with similar attitudes to your good self will only understand once they are burnt.
It is also true that many of the best algorithmic software writers in the world are drawn from the hacker and virus writing communities. And there is an obvious reason for this, which should not need to be explained again. For instance, there is an investment company in Sydney that advertises for programmers with virus writing experience, which is a pre-requisite for training in their algorithmic trading software group. For instance, the Los Angeles Hacker group develop algorithmic trading software and use very similar, though obviously modified code. I was at a conference in San Francisco last year that showed how neural networks and artificial intelligence are being used in trading systems, and some of these were coming out of university research institutions. And so it goes on.
One of the issues here with the ASX however, should be a discussion on whether the ASX should be required to operate an algorithm server.
Every algorithm would require certification.
Each developed algorithm gets sent by the owner to the ASX, who analyses it, tests it, certifies it, and tags it with a number and tracing software.
The company is then licensed to use that algorithm, and must do so via an execution routine from the ASX algorithmic server.
This is not rocket science, and it is not difficult to do, in fact there is one small bourse in the UK that is doing exactly this, and so you would be far less likely to see the crashes we have experienced in exchanges across the world in the last 2 years.
If we must have algorithmic trading, then let's be smart about it.
