Mitchell D. Mittman CTO at TraderTools
Mitchell D. Mittman CTO at TraderTools

e-FX paves the road for FX Algorithmic trading

The advent of e-FX has made Algorithmic trading possible in the FX world. Mitchell Mittman highlights the increasingly important role Algorithmic trading will play in FX.

The advent of e-FX has made algorithmic trading possible in the FX world by providing efficient distribution of market rates and the ability to automatically execute trades according to algorithmic parameters. Ever-increasing efficiency of the e-FX part of the trading process allows for greater improvements in algorithmic systems. The result? Increased trade flow through electronic forex execution systems and the continued growth of FX trading volumes globally.A definitionBefore discussing the effect of e-FX on Algorithmic trading, a definition of what algorithmic trading is in order. The Tower Group defines algorithmic trading as:“Taking a buy or sell order of a defined quantity, and placing it into a quantitative model that automatically generates the timing and size of orders based on the specific goals of the algorithm. This approach is typically oriented around trading to a specific benchmark, price or time.”By combining a number of factors (including market price, wait-time,...continued

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