William Essex
William Essex

Adaptive FX algorithms - giving control back to clients

What, do you suppose, is the opposite of “adaptive”? Rigidly inflexible, perhaps? Incapable of adapting to changed market conditions? To suggest that we trade/execute in FX with rigidly inflexible algorithms would be ridiculous. But if we’re talking about adaptive capability (adaptiveness) in the context of the microstructure and dynamics of the FX market, there’s a surprising amount more to be said than just: let’s be as adaptive as we can. FX is big, liquid, complex, changeable, unpredictable, and a lot of other adjectives as well. To maximise the adaptiveness of your FX-algo suite is a good idea. To believe that this will always be a simple process – no

First Published: e-Forex Magazine 50 / Algorithmic FX Trading / January, 2013

To define terms at the outset, adaptiveness might be flexibility; it might be agility; it might encompass low latency and HFT functionality. Ideally, it delivers closer control. In the real world, FX-adaptiveness also necessarily crosses boundaries between asset classes. BNP Paribas’ Cortex iX FX spot algorithmic execution service, for example, may be a “tool in the toolbox” for FX execution, as Asif Razaq, global head of FX algo execution at BNP Paribas has described it, but it also plugs into the overall Cortex “cross-asset electronic trading, market intelligence and post-trade service”.  Discussing adaptiveness, Razaq says: “Cortex iX is third generation, in that it is able to take signals from the market and adapt its execution strategy mid-execution as a function of what it sees going on in the marketplace.” The previous generation would just press on with its execution order, following its pre-set execution rules, regardless of price actions, liquidity...continued

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