First, I was wondering what causes the market to move so drastically in just a couple seconds sometimes (I'm sure there is a term for this but I just call this occurrence a micro burst)? I'm assuming that its HFT and algos, etc that are causing this?
Can anyone explain the basic (in a nutshell) mechanics behind (some of) those moves? I've heard that some traders with the means to do so will flood order routing services to create risk free trade opportunities in the brief mayhem that their huge flood of orders created?
Second, What are the odds of an average trader being able to catch a small piece of those micro bursts using a very simple strategy while trading off-site (not co located at the CME etc.)?
For example, could a simple strategy that is triggered by a large spike in the number of transactions per milliseconds. ever have a chance at consistently scalping a few ticks? I would imagine that after the strategy is triggered it would fire off a market order in the 'direction' of the micro burst in the hopes of scalping those few ticks.