Forex Trading Technologies

The Forex world continues to evolve, particularly in terms of digitalisation and the widespread adoption of new forex trading technologies. Cutting-edge platforms, artificial intelligence (AI) and possibly even blockchain certainly look to be advancing the digitisation of forex.  

A quick look at the forex market

The forex market today is said to be worth over US$2 quadrillion, with a daily trading volume of US$6.6 trillion. This makes it the largest and most active financial market worldwide, taking into account trading volume, value, and liquidity. An infinite number of trading decisions are made by global traders every day, which come with obvious risk and volatility. It’s no wonder then that the industry has spawned a variety of cutting-edge forex trading technologies to optimise the trading experience.

So how is forex trading being transformed?

Algorithmic trading has changed the way people trade forex. So much so in fact that it’s been said that the algorithmic trading market is expected to grow by $4 billion by 2024.

Algorithmic trading and AI

Algorithmic trading is rapidly changing, with the move to AI and machine learning gaining momentum. But how do traditional algorithmic trading methods differ from AI-enhanced algorithmic trading?

• Algorithmic trading traditionally utilises a computer program that follows a set of predefined rules (algorithm) to execute a trade. The rules are usually established by programmers and the system is generally unable to learn on its own.
• AI trading in contrast makes use of machine learning to predict how the market will react under various circumstances. AI trading depends heavily on artificial intelligence that uses continuous learning to set the conditions for trades. It does this by using sophisticated algorithms to analyse market conditions (past/present) and trading patterns to predict future trends.

While both methods of automated trading offer obvious benefits, AI trading is revolutionising the forex industry. Especially in terms of risk reduction during highly volatile trading periods as it reduces emotional factors impacting trades. Machine learning can also help traders to optimise their trading strategies and potentially trade better. It does this through the speed at which data is gathered and processed, providing greater real-time insights into the market.

What other advantages does AI-driven algorithmic trading offer?

• Faster trading speeds (measurable in microseconds and even nanoseconds).
• Predictive analysis allows for quicker, real-time analysis of large volumes of data and market trends.
• Adaptability to changing market conditions.
• Faster algorithmic development.
• No human error.
• The risk of trading decisions being influenced by emotional and psychological factors is eliminated.
• The likelihood of trading becoming more effective and cost-effective increases.

Advanced trading platform technologies

The adoption of cutting-edge trading platforms to meet the needs of global traders is increasing in the highly competitive brokerage space. New innovations are revolutionising the forex industry to make trading accessible to all types of traders worldwide. There is a diverse range of forex trading platforms available to choose from, some significantly more popular than others. One such trading platform is MetaTrader 4.

MetaTrader 4

MetaTrader 4 (MT4) is probably the most popular forex trading platform among CFD traders. MT4 appeals to forex traders internationally for many reasons. This includes its technical analysis options, a flexible trading system, and algorithmic trading with access to Expert Advisors (EAs). In fact, algorithmic trading is one of MT4’s strongest features, enabling trading with the help of EAs (automated trading robots). Trading robots can analyse currency quotes and execute different trades based on a trader’s settings. This removes emotion from trading which may negatively affect investment decisions.

The MT4 trading platform also offers extensive analytical capabilities.  Currency symbols can be shown in 9 timeframes, giving traders the ability to view price dynamics in more depth. 30 built-in technical indicators and 24 graphical objects are also used to identify trends and determine entry and exit points. These features enable traders to better analyse market movements and predict the best time to trade. MT4 also supports all order types and execution modes, advanced charting, explanatory activity reports, and online streaming of market news. 

MT4 WebTrader 

The ability to launch MT4 from any internet browser has been made possible, without the need for additional software. This has made it considerably easier for international traders to access global markets and trade online. The MT4 WebTrader trading platform is supported by Windows, Mac OS, iPhone/iPad, Android, and any internet browser.

IronFX, a leading forex broker with over 1.5 million customers worldwide, has also recently launched the IronFX Web Trader App. This next generation, the mobile app syncs effortlessly with the MT4 platform. Trades can be executed on the go from a mobile device, no matter where you are in the world.

Forex trading technologies and blockchain

There is massive interest in blockchain applications across industries today, including forex. The technology is considered to have the potential to transform forex trading, with greater transparency cited as being the biggest benefit. But the adoption of blockchain technologies in forex has been slow and not without hesitation by the industry at large. This may be attributed to factors like limitations on the oversight that regulators require, or general resistance by traders and brokers.

Enhance your trading with IronFX

If you’re looking to start forex trading, sign-up with IronFX, a leading broker, and dive right in. Access IronFX’s extensive range of educational videos and informational articles, videos, guides, and FAQs online. These resources and many others can be found on the IronFX website under the IronFX School or blog sections. If you’re not quite ready to execute real trades, open a demo account and practice trading forex using virtual money.  A demo account simulates a real trading environment, providing the perfect opportunity to test your trading plan and strategies.

Disclaimer:

This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked, in this communication.