[thibautx]

> If every exchange had a minimum of, say, a minute after an order is submitted until it is executed (during which time it couldn't be amended or cancelled of course) it seems you would greatly reduce the risk of "flash crashes"and unnatural manipulation of the market.

Sorry, but a minute delay is definitely not a solution to your idea of unnatural market manipulation. Artificial delays can be seen in the Chinese equities markets - trading halts given a +/- 10% intraday move, trading halts for up to 10 trading days before news announcements, you can only see quotes every half a second -- all measures to benefit retail traders over institutional traders, a paradigm the American markets inherently oppose. HFTs solve that problem by providing retail investors the same kind of access as institutional investors.

>I know "market liquidity" is an argument for allowing HFT, but haven't hard a good explanation about why the economy would suffer so much if the ultra high frequency trading just wouldn't exist.

HFT is a natural effect of electronic trading in contract to traditional forms of market making and liquidity providing. More often than not, thin spreads are often returned back to retail investors.

Other than some anecdotal evidence of "flash crashes" [1][2], how does HFT negatively impact the market?

https://en.wikipedia.org/wiki/2010_Flash_Crash

http://www.bloomberg.com/bw/articles/2012-08-02/knight-shows...