While technology has always sought to solve societal problems and drive advancement, the rate and pace of innovation has been particularly pronounced through the digital age. This has been borne out by the emergence of blockchain and cryptocurrencies, which despite only being formally conceived with the launch of Bitcoin in 2009, has evolved to command a total market cap value in excess of $2.4 trillion. Make no mistake; technology is always evolutionary, and there’s no doubt that it has also shaped and changed the forex market considerably over time. We’ll explore this further in the post below of revolutionised trading.
How Has Tech Changed Forex Trading?
Whereas forex trading was once considered to be quite a mechanical and analogue process (with orders processed through a corporeal broker and instructions often issued by telephone), the landscape has changed markedly through the digital age.
More specifically, the rise of online trading platforms has completely digitised the forex trading process, melding insight platforms, brokerage services and order execution into a single, accessible interface.
What’s more, this technology has also introduced the concept of automated trading, with this growing to dominate the forex market as investors look to create and deploy so-called “forex robots”.
A common feature of platforms such as the MetaTrader 5, such robots describe automated trading systems that have been programmed to automatically create buy and sell orders according to several, predetermined conditions.
In this respect, robots represent a subset of algorithmic trading, which broadly seeks to eliminate the impact of human error and remove the emotive element from real-time forex trading.
Ultimately, automation in the forex market helps experienced traders to optimise successful trading strategies, which can be scaled accordingly to execute a high volume or orders and underpin practices such as high-frequency trading (HFTs).
The Rise and Rise of AI
Another significant tech advancement in the forex space can be observed in the form of artificial intelligence (AI), which is now widely used as a way of driving more informed and intuitive trades.
In conjunction with big data, AI can also be used to draw on unstructured and disorganised datasets, such as those accessible through social media. This, in turn, makes it possible to garner real-time and detailed market insights that would otherwise be unavailable to traders across the board.
This certainly enables traders to identify unique and influential trends, through an accessible medium that levels the playing field between retail and institutional traders.
Perhaps the biggest consideration here is the widespread nature of these cutting-edge innovations, which are now much more accessible and available to a wider range of inexperienced and retail traders.
As a result of this, the composition of the market is continuing to evolve, while daily revolutionised trading volumes increase in line with the underlying number of participating investors.