At this week's Aite Group event focused on high frequency trading, a panel discussion brought together members of the high frequency community together to discuss the value of their trading style as well as some of the confusion and controversy around the practice.

The panel was moderated by Paul Zubulake, senior analyst at Aite Group and featured Matthew Cushman, managing director, quantitative strategies, in the electronic trading group at Knight Equity Markets; Richard Gorelick, chief executive officer of RGM Advisors, a proprietary high frequency trading shop; Arzhang Kamarei, managing partner at Thesys Technologies, a high frequency trading technology provider; and Cameron Smith, general counsel of Quantlab Financial, a high frequency trading technology and software development company.

While many debate the value of high frequency trading and the controversy around it, Smith said that it is important not to confuse it with flash orders. "Flash orders are a market structure issue," he said.

Gorelick explained that there many very diverse strategies that make up the high frequency trading world but that in general they fall into three categories. The first being the automated market makers, the second being predictive traders and the third being arbitrage traders.

As for the value of high frequency trading, Cushman said that he is "pro-flash order" and also pointed out that market participants benefit from high frequency trading as high frequency trading creates opportunities for them by providing more liquidity.

Smith agreed that the real value of high frequency trading lay with the liquidity that they are providing. He said that he estimates there are somewhere around 50 to 100 high frequency trading firms and "the beneficiary is the end investor."

He added that the liquidity provided by high frequency trading creates a healthy market environment for even the individual investor. Kamarei agreed and explained that during the turbulent fourth quarter of 2008 it was high frequency traders that stepped up and provided liquidity.

He also said that it is a myth that retail investors are mismatched against high frequency traders. "It's not true. The retail brokerages have bigger market cap and direct order flow to the automated market makers so they are participating on the best technology," he said.

High frequency trading also provides a valuable link between the visible markets and dark pools, according to Cushman who said it "provides a service by adding liquidity to into both."

Regulatory issues were also a hot topic for the panel. But Kamarei said he wasn't too worried about regulation. "If they stop high frequency trading then volumes go down 50 percent I think they would reverse course pretty quick," he noted.

Gorelick added that as market structure has become politicized it was important for firms such as his to "get out and explain who we are and what we do." He said that when the controversy around high frequency trading began he was not prepared for the backlash or how to approach it from a public relations perspective.

"We have to get out and explain how any proposed changes would affect investors," he explained.