Can Technical Indicators Still Work When High Frequency Trading Dominates the Market?

In July, I pointed out that high-frequency trading is distorting the market, and that – at least on some days – many more high-frequency trades occur than normal trades by human investors.

Friday, I quoted Senator Ted Kaufman:

The chief executive of one of the country’s biggest block trading dark pools was quoted two weeks ago as saying that the amount of money devoted to high-frequency trading could “quintuple between this year and next.”

I know that technical market systems such as Elliot Wave are supposed to work no matter what is going on. And I know that people program the computers used for high -frequency trading.

But given the massive distortions by hft, dark pools and other shenanigans, and the speed with which things can happen in this volatile market, can Elliot Wave and other predictive systems still work?

I look forward to comments one way or the other from technical traders who are more knowledgeable than me on this subject.

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