As fascinating as it may seem, computers are becoming the tool of choice for many. For example, in order to buy premium domain names that have expired, one can create a program that will try to purchase the domain name at the exact moment that it expires. For example, a domain name with an intrinsic value of $1000 can be sniped for $10 a year.
A computer program can be created that will look over a company’s financial statements and determine how many shares if any the computer program will buy.
As many will know, the stock price is driven by profits but also by speculation. Therefore, when purchasing stocks one needs to look beyond the books and into the computer programs that are programmed to buy and sell stocks at any time. In order to master the market, one will have to have a firm understanding of what the computer programs deem stocks that are sell or buy.
Therefore, when people say the stock price is driven by speculation, they are partially right. The stock price is also driven by computer programs that are designed to automatically buy and sell stocks based on the criteria programmed into the computer program. These computer programs most likely have some sort of artificial intelligence. After all, many companies are leaving these computer programs running on autopilot.
High frequency trading can be read about in the Wikipedia at http://en.wikipedia.org/wiki/Algorithmic_trading
Why high frequency trading forces people to purchase at higher prices can be seen at http://market-ticker.denninger.net/archives/1259-High-Frequency-Trading-Is-A-Scam.html. Based on the fact that flash trading, http://www.investopedia.com/terms/f/flash-trading.asp, is allowed in some stock exchanges, computer programs can be programmed to take advantage of a sellers market.