Before revision: High frequency trading has been characterized as an arms race with 'Red Queen' characteristics Farmer,2012 . It is improbable, even impossible, that many market participants can sustain a competitive advantage through the sole reliance on low latency trade execution systems. The growth in volume of market data, advances in computer hardware and commensurate prominence of machine learning in other disciplines, have spurred the exploration of machine learning for price discovery. Even though the application of machine learning to price prediction has been extensively researched, the merit of this approach for high frequency market making has received little attention.
After revision: High frequency trading has been characterized as an arms race with 'Red Queen' characteristics Farmer,2012