I'm against flash trading but 6 months (or even 6 days) is throwing the baby out withthe bathwater. Look, I'm broke - lend me $10/ thanks. OK, I paid my rent and got paid, here's $11, thanks a lot. That's what liquidity is, and it's important - with your suggestion everything would become glacially slow and tiny credit hiccups would become hugely amplified. You should be able to buy when you see an opportunity and sell when you need cash, even if your need of cash is to finance another buy.

The problem with flash trading is that its practitioners are in effect paying the exchanges for the right to join in on a trade after it's been proposed and they can see whether it has profit potential or not. Sure, they are making tiny margins of a fraction of 1%, so they say it's not greedy. Good point. But you can only afford to do that if you've got fat money to participate and to make up for those tiny margins they're putting up big money on every deal that does show profit potential.

I find it hard to believe it's been legal up to now. Every time I study it, I'm reminded of some old movie where a gangster has paid out money for a private telegraph line to get the results of the horse race while the betting is still open at a remote location.

I think the long-term quantities you propose like 6 months and 2 years are absurd, but I agree with your basic premise that too much speed trading undermines the market's price discovery function and evaluates arbitrage over considerations of fundamental value. It would be interesting to model this behavior with an agent-based simulation of a virtual market.