Emerging Trends in Foreign Exchange Industry

Political factors such as United States of America election and Brexit makes the forex traders in 2016 trade more on hedge funds and many bank trading rooms. The uncertainties in the stable currencies in the forex market is driving more volatility in 2017. There are many hopes as time goes because of the light regulations due to the most active buying side and many liquidity providers. This aspect is transforming the possible blockchain and also the future roles of the individuals in the forex market. Here are the possible trends in the forex market as time evolve.

  • The liquidity and Volcker rule

There are many regulations in the forex market such as Base II and Dodd Volcker Rule. These rules are making hard for the central banks to warehouse possible risks. This aspect is making forex traders scare away from providing liquidity. The Volker Rule is the stapling block because it does not allow banks to compete. Liquidity is what always fore traders think of in the forex market and wonder whether such volatiles spikes will still occur in the future.

  • Speed bumps and algorithms

Speed based as apart of trading strategies is becoming less important is the current forex market. The innovation of speed bumps is replacing speed based strategies. The speed pumps will help in preventing fast traders from detection of information on various order and cancel their quotes on various forex trading platforms. It also prevents short-term arbitrage and fast execution. Many algorithms are formerly base on speed have reached the saturation point. As time evolved, there is a continuous shift from the strategies that are aggressive to more passive strategies that basically based on electronic marketing making.

  • Buying side goes direct

Many banks are reducing staff regarding the experience because there is the constant rise of the alternative liquidity resources. The innovative trends become possible when there is a change in regulations, and that is why buying side is becoming the strong force in the forex market. Buy-side now has the ability and opportunities to post their preferred liquidity direct to the marketplace rather through the selling side intermediary. The buy side usually has the most interest in the forex market especially in hedging and funding requirements, and that is why they add more liquidity to the overall forex market.

  • Future of humans

There are many recent technologies such as big data analytics, and algorithms. These help in the integration in making forex trading decisions. Many people fear that the future of the human is a threat, but many participants prove that individuals still have a role in human interaction. People will be making use of machine learning and algorithms to enact desires and direction of the technology behind the algorithms. These technologies will also help the trader to deal with large order and many clients at the same time when looking into economic calendars. Technology always provided an overall positive impact on any business industry. Technology will ease the workflow in many routine areas.

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