What is the Next Big Technological Step in Forex Trading?

FX trading utilizes some of the most complicated financial trading mechanisms and software in the entire financial world. It has been argued a number of times that facilitating the retail FX trading environment takes up more resources throughout the world than any other financial market – and we absolutely believe that this is true.

Each and every day, over 6 trillion USD worth of currency changes hand. To keep track of all these millions of transactions, technology needs to continue to evolve to make trading faster, more reliable, and of course – fairer.

So where is FX technology heading? Are we in for a revolution in the way that we trade Forex in the next few years, or are things currently sailing along a nice course smoothly?

The Next Big Thing in Forex

We’ve already seen the addition of Forex trading apps for iPhone and Android devices. The iPad has also revolutionized the way that we trade Forex. But are there any other technological developments which could take place in the near future?

Yes! However, they are more behind the scenes changes than ones which are actually practical to use from a customer standpoint.

One of these changes will be the way that Forex transactions are processed behind the scenes. At the moment, most transactions are routed through a dealer before actually being executed. Whilst this is still a very fast method of trading – it does lack the speed and ability that “non-dealer” trading has. Essentially, non-dealer trading is where trades go straight to the trading floor so that your broker doesn’t even have a chance to view the trade before it is executed.

There are a number of positive features to having this take place. Trading times are increased, and the following things are minimized:

  • Slippage
  • Re-quotes
  • Intervention and trade cancellation by the FX broker
  • Trading errors arising from Forex broker error

As you can see, once all Forex brokers begin using this new system, trading times will be chopped in half, and the industry as a whole will operate much more fluidly.

Other Enhancements to Forex Trading

A few other enhancements include trading from the charts. This is utilized currently by just a few Forex brokers, but there are still numbers out there which do not allow this functionality. This should change within the next 2 to 3 years, as chart trading becomes much more important to technical traders.