Nicholas Hastings
Nicholas Hastings

Sharpening the tools of the trade: New developments with FX Strategy back testing platforms

Back testing foreign exchange trading strategies has always been more difficult than it has been for equities, futures and options not only because of the difficulty in obtaining appropriate historical market data from the FX market but because of the sheer scale of the amount of data that needs to be processed. Nicholas Hastings investigates.

First Published: e-Forex Magazine 72 / Trading Operations / July, 2016

The difficulty in getting price transparency given the high level of fragmented liquidity in FX coming from numerous global sources and the high cost of the infrastructure needed to help optimize trading strategies continue to produce new challenges for trading firms seeking to use back testing as a way of checking whether strategies that have worked at producing profits in the past will work once again at producing profits in the future.   The arrival of new technology, the creation of new platforms that can conduct back testing on a large scale, the use of the Cloud as a means of storing data and the launch of new hosted service providers for multiple customers are all helping the industry to advance and ensure that back testing as means of controlling risk is becoming more successful at producing profits than it was in the past. Challenges Perhaps the largest but not by any means the only challenge for foreign exchange back testing is quality control – the ability to generate clean...continued

Exclusive Content

The full article is only available to current subscribers. Click here to sign in or subscribe by clicking here