Yes they CAN be challenged. They're nothing but a scalping robot who probably pays no commissions except for the exchange and regulatory fees. I've tried doing this in the past. Just churn and churn for a penny or two with lightning speed and you can make 2000 a day but you would only be covering commissions and other fees. And I didn't try this with bots. I did it on my own and I was making 1500-2000 a day when I was trading nasdaq a couple of years ago with tradestation. Unfortunately, I had no programming skills and even if I did, I think it would be impossible to program a bot based on my gut feeling. If I could some how do that, I could probably make 10,000 a day. But what good would it be if the fees are more than that?
I believe Swift trade teaches all their traders this type of hyper trading. Because when you take a look at their p&l's you always see them making around $2000 gross on like 500,000 shares and their net comes out to about $1500... With that many shares to make 2000 gross, it's obvious that their trading similar to tradebot. Their commissions are dirt cheap like .15 a trade and they get ecn rebates and their biggest cost is only sec fees. But their payout is permanently around 50%.
So hyper trading can only be accomplished profitably if you become the brokerage yourself or you find a broker in the u.s. similar to swift trade which is impossible as far as I know. Oh, and also, albeit the low risk, there's nothing more stressful than this type of trading, since your constantly in the market digging for pennies...
