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"Predicting markets is hard. Predicting how thousands of heterogenous agents will react to your order is even harder, if not impossible."

My very small amount of knowledge on this topic leads me to believe that the idea that one algo would specifically target another algo is not at all farfetched. Who cares how the market responds to your weird trading if you're trying to create distortions for one, or a few, actors ?

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Because the market has many actors. If I try to push the market down to shake out stop losses, another trader may say, "Hey, this price move doesn't make sense considering recent activity, how the broad market is moving, etc., I'm going to buy more" and prevent me from doing so. Likewise if I'm shifting the depth with a big false order. I might induce some actors to do bad trades, but another actor might see my order as a great opportunity to trade in size and trade against it, so I'll take a loss.

Liquid markets with a diverse set of actors are more resilient to manipulation attempts. It's hard to do unless you have more capital or are willing to take risk that other actors in aggregate are not.

'"Hey, this price move doesn't make sense considering recent activity, how the broad market is moving, etc., I'm going to buy more"'

Betting you know more than the guy moving large size rarely a good move, though...

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