To oversimplify, there are two kinds of trading strategy: value-based and momentum-based.
Value investors judge investments by the expected revenue from it if they hold on to it for long. HFT does not bother them, except in so far as it increases the amount of uncertainty that you can pick up bargains when you see them due to uncertainty.
Momentum investors, or speculators, judge investments based on whether they think they can soon sell higher than they buy. HFT is supposed to be bad for them, since very high volatility makes the kind of judgements they go in for harder. Usually, HFT is itself a kind of momentum investing, albeit of a strange sort.
If HFT reduces the returns from momentum investing while leaving value investment strategies largely unharmed, it might correct bad incentives in finance and so be a very good thing.
Value investors judge investments by the expected revenue from it if they hold on to it for long. HFT does not bother them, except in so far as it increases the amount of uncertainty that you can pick up bargains when you see them due to uncertainty.
Momentum investors, or speculators, judge investments based on whether they think they can soon sell higher than they buy. HFT is supposed to be bad for them, since very high volatility makes the kind of judgements they go in for harder. Usually, HFT is itself a kind of momentum investing, albeit of a strange sort.
If HFT reduces the returns from momentum investing while leaving value investment strategies largely unharmed, it might correct bad incentives in finance and so be a very good thing.