e-Forex Magazine | Features | Modelling the FX trading environment with intelligent analytics
Features : Modelling the FX trading environment with intelligent analytics
First Published in e-Forex Magazine January 2012
Nick Pratt
Analytics are the basis of any trading strategy. This is, of course, an obvious statement but, as Nicholas Pratt reports in this feature, the realisation that a more intelligent approach to the use of analytics leads to a more intelligent trading strategy is increasingly apparent in the FX world.
A report by consultant Grey Spark Partners titled "Trends in e-commerce and electronic trading", conducted in 2011, showed that currently more than 60% of FX is traded electronically and this figure is set to grow to over 90% by 2014, thus equalling the level of electronic trading in the equities and futures & options markets.
This increase in adoption is sure to spark fierce competition between the providers of FX trading platforms, both from a bank/dealer perspective and among the software firms that supply the technology for these platforms. Therefore one way for firms to differentiate their offerings is likely to be the addition of built-in analytics to these trading platforms. The Grey Spark report cites a number of factors that will influence buy-side dealers' choice of broker, such as competitive price and also functionality of trading platform, particularly if buy-side dealers are going to be using a single broker's platform across all asset classes. And this functionality includes the provision of client static data, instrument static data, market data distribution and core pricing and analytics.