Bankers have claimed a scalp in a backlash against ultra-fast traders that has turned the foreign exchange markets into a battleground between high-tech trading systems and old fashioned dealing by "real" people.

ICAP, the world's largest interdealer broker, has come down squarely on the side of the humans, announcing plans to clamp down on "disruptive" practices by high-frequency traders on its popular forex platform EBS.

Investment bankers have been complaining for years that HFTs, often automated models trading at lightning speeds and owned by hedge funds, distort the market, prompting regulatory scrutiny.

Many currency brokers have complained about the activity of certain high-frequency traders, whom they say do not add liquidity to the market, while confusing other traders in the process.

"It's frustrating and it's harder to transact cleanly in the market," says a forex trader at one big bank. "It's something that affects you every day but you deal with it."

The measures announced by ICAP will target practices including "statistical arbitrage", where models attempt to track discrepancies that exist in the forex market, profiting for example from the milliseconds it takes for headlines in New York to affect the London market.

Other HFTs will place and withdraw orders so quickly that manual traders are unaware they are even there. Traders say it takes 300 milliseconds for a human to place then cancel an order. For an HFT model, it takes less than one millisecond.

David Fuller's view Each article on predatory high-frequency trading adds a little more information to our knowledge on developments, so I commend this one to you.