can happen "unwittingly," despite a regulation requiring the first order placed to be the first order filled
You put quotes around "unwittingly" like you don't believe it. It really is unwittingly - the high frequency shop submits a bid at the same time as another place (or even afterwards), but the exchange fulfills the HF order first. See page 17 in http://sec.gov/comments/s7-02-10/s70210-129.pdf for how it occurs and page 18 for some real world examples.
In a given trade, the violation of the price time rule may be inadvertent, but evidently the pattern that this happens is well known. So I put the word "unwittingly" in quotation marks, not to show exactly that I don't believe it, but to adopt the exact language that was quoted in this thread. And now I raise the question: if the trades that violate the price time rule cease, how different would the performance of the traders be? Does this known phenomenon of violating the regulation have a predictable effect on some kinds of trades that is different from faultlessly following the regulation?
if the trades that violate the price time rule cease, how different would the performance of the traders be?
"Empirically there is a 1.7 cps difference in profitability for a posted share that is first in line vs one which is last in line" (pg 17 from the document linked above. You have read, that, right?)
There's what sounds like a reasonable proposal in that document too.
You put quotes around "unwittingly" like you don't believe it. It really is unwittingly - the high frequency shop submits a bid at the same time as another place (or even afterwards), but the exchange fulfills the HF order first. See page 17 in http://sec.gov/comments/s7-02-10/s70210-129.pdf for how it occurs and page 18 for some real world examples.