Algorithmic trading

Recently I have seen a lot of people from IITs enter the finance industry in Algorithmic trading. I don't think the industry is saturated at all, but statistics and computer science methods are not as applicable to this form of trading as can be made to believe. The fact is that more than 60 percent of the trading on most products is done by at most 4 to 5 traders who can control the combined performance of all the other market participants and easily squeeze them by sort of collusion. and collusion happens almost inadvertently if you model your adversary and try to estimate combined positions changes for other members. Basically I wanted to say that the insample and out of sample performance of all computer science methods in high frequency finance is going to be abysmal due to some of the facts above ad just the number of people trying to take so much risk for so little profit, that only the adverse fills are exaggerated.