1.0 High Frequency Trading1.1 What is High Frequency Trading High frequency trading is a form of automated trading that uses supercomputers to process or process orders of mega-transactions at super-fast speed, which are mainly measured in microseconds or milliseconds. (Investopedia, n.d.) with the aim of identifying and arbitrating temporary market inefficiencies created by the competing interests of market participants (Aldridge, 2013). Algorithms, low latency technology, high message rates and high-speed connections are the 4 main features of the market. performance of high frequency trading. Algorithms are a set of instructions to accomplish a given task. So, a trading algorithm is just a computerized model with steps to trade an order in a specific way (Johnson, 2010). HFT algorithms are intended for decision making, initiation, generation, routing or execution of an order for each individual transaction without human execution. (Aldridge, 2013) In contrast, low-latency technology infrastructure is essential for high-frequency trading. This infrastructure is designed to minimize response times, including its proximity and co-location services which thus improve execution speed (Cisco, 2014). Therefore, computers play a very important role in replacing slow humans in business decisions. message rates and connection speed in HFT which relate to response speed for market order entry, order quoting and cancellation speed. 1.2 Strategies of High-Frequency Traders High-frequency traders use various strategies when performing HFT in the market. Such as arbitrage strategies, event-based directional strategies, automated market trading, and liquidity detection...... middle of article......[Accessed: April 6, 2014 ].Tabb Group; Rosenblatt titles. 2014. Decline in high-frequency trading in the United States. [online image] Available at: http://www.nytimes.com/interactive/2012/10/15/business/Declining-US-High-Frequency-Trading.html?ref=high Frequencyalgorithmictrading&_r=0 [Accessed 10 April 2014]. Touryalai,H,2014. NY AG's new crackdown targets high-frequency trading. [online] Available at: http://www.forbes.com/sites/halahtouryalai/2014/03/18/ny-ags-new-crackdown-targets-high-Frequency-trading/ [Accessed: March 25, 2014] Wagner, R. and Tan Bhala, K. 2011. High Frequency Trading – Financial Ethics – Seven Pillars Institute. [online] Available at: http://sevenpillarsinstitute.org/case-studies/high-Frequency-trading [Accessed: April 8, 2014].Wikipedia.2014. 2010 flash crash. [online] Available at: http://en.wikipedia.org/wiki/2010_Flash_Crash [Accessed March 23 2014]