The World Federation of Exchanges (WFE) just released a report on high-frequency trading, which provides some interesting statistics. Based on its study, the WFE concluded that HFT is made up of a "diversity of strategies that primarily involve variations of market-making and statistical arbitrage strategies" that add to market liquidity and pricing efficiency, which in the end helps retail traders.
The problem is the dark side that can't be accounted for, ie. the problem of getting "verifiable data from dark execution venues."
Still, HFT is a major component of regulated trading market share and grows quickly when first adopted by local traders but then levels off, as is what has happened in the United States and Europe. In 2009 HFT was 61% of the U.S. market share of exchange trades; in 2012 this dropped to 51%. Part of the reason for this drop is exchange markets have adapted, providing “unquestionably faster, more transparent and more efficient” market structures than before, states the report.
This too means better markets for traders, the study states, concluding that HFT “has had measurable beneficial impacts on a variety of core market quality metrics, including tighter spreads, increased liquidity, more efficient price formation, reduced transaction costs for market users and lower market volatility in most circumstances.”