Part 6/10:
The financial collapse of 2018 marked a critical moment in understanding the vulnerabilities of high-frequency trading systems. As markets react increasingly to automated trading signals, they become susceptible to crashes that traditional safeguards cannot mitigate. The market instability is often exacerbated by unforeseen events—such as a high volume of automated orders executed simultaneously, potentially triggering a cascading market failure.
This dynamic was exemplified in instances like the market flash crashes of 2010, triggered by significant automated trading orders, which led to a halt in trading due to massive liquidity withdrawal.