Group Co.
Currency Trading that Everyone Can “LIKE”
Traders Magazine Online News, August 3, 2017
This past May marked the five-year anniversary of Facebook going public, a seminal event that cemented the influence of social media on our lives.
At the risk of heaping too many additional encomiums on the bright people that brought us these networks, it’s not hyperbole to note that the advent of social media has changed the way we interact. People can now very easily reconnect with grade-school friends, quickly share photos of loved ones, and be introduced to new people through mutual friends or shared interests. At the same time, everyone has the option to control their levels of privacy. You can view and share only those things that suit your needs.
The future of trading technology is going in the same direction. Each trader will sit at the center of their own universe controlling what trades they make available to whom. And the best market to demonstrate this new paradigm is the currency market.
FX is the world’s largest financial marketplace at $5 trillion and growing. It is a very complex market that thrives on prescient reactions to geopolitical events and a refined understanding of finance and technology. It’s not a market that can be summarized in the space of one article, but for the purposes of this piece I’m going to try and keep things very simple.
First, why is currency trading so popular? The reasons have less to do with currency as an asset class than the market structures that govern its exchange. Simply put, the FX market is unlike any other asset market. The sheer size of the global FX market means it is also the most liquid. And it is also geographically dispersed in a way that no other market can claim. That means nearly continuous trading activity across every world time zone. Thus it has emerged as a hotspot among investors chasing alpha by diversifying into multi-asset trading strategies.
These developments have created the perfect storm of opportunity for new investors eyeing the FX market. At the same time, cost effectiveness is at a new premium for existing FX players and all are searching for the right platform that is going to give them the most for their money.
And regardless of whether the trading entity is a bank, pure FX player or any kind of financial institution or market player, all of them have three basic questions when it comes to looking at what technology they will use: Can I access the greatest liquidity? Can I customize it to my needs? Do I have access to a variety of smart trading strategies that uses this liquidity?
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