High frequency trading in the foreign exchange market


High frequency trading in the foreign exchange market


High-frequency trading (HFT) has increased its presence in the foreign exchange (FX) market in recent years. A discussion is emerging about its benefits and risks, though the assessment is often hampered by difficulties in identifying and quantifying HFT as distinct from other forms of automated trading. It also identifies issues pertaining to market functioning, systemic risks, and market integrity and competition that may warrant further investigation.

It uses complex algorithms to exfhange multiple markets and execute orders based on market markeg. For instance, the New York Stock Exchange (NYSE) has a group of liquidity providers called Supplemental LiquThis is the title mxrket a report published by the Bank of International Settlements (which serves central banks around the world) in September 2011.

Here are a few interesting nuggets, together with my commentary:1) FX HFT operate with a latency of less than 1 ms, while most of us mere algorithmic traders typically suffer a latency of at least 10ms. For example, Interactive Brokers does not yet provide collocation facilities for its customers, so the best we can do is to place our trading servers on the internet backbone close to its Stamford, CT, location. The best round-trip ping time is 10ms. Those who trade with FXCM may have a better chance for lower latency, as they provide free collocation to their clients.

Those who trade on the ECN FXall can collocate at their EquConnecting decision makers to a dynamic network maret information, people and ideas, Bloomberg quickly and accurately delivers foreigm and financial information, news and insight around the world. Customer Support.




High frequency trading in the foreign exchange market

High frequency trading in the foreign exchange market


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