Peter Sibirzeff CEO of Alphacet
Peter Sibirzeff CEO of Alphacet

A new approach to FX Alpha strategy development

Back in the early 1970s, the foreign exchange (FX) market was a little-known world primarily relegated to currency traders inside central banks and government institutions. However over the past 40 years, FX trading has exploded into one of the largest asset classes globally with several trillion traded each day. From the introduction of online currency trading in 1994 to the arrival of the Euro in 2002, FX trading has come to attract some of the best financial talent around the globe – gaining attention from prominent hedge funds and commodities trading advisors (CTAs), as well as leading banks and financial institutions.

Yet despite the influx of talent and volume into the FX market, many of the market’s original members have not strayed far from their humble roots. While more established asset classes such as the equities market have gravitated towards new algorithmic trading technologies, many in the FX field have shied away from these innovations, choosing instead to rely on simple analyses often run in Microsoft Excel. While some of this discrepancy is based on fundamental differences in how FX is traded – over-the-counter (OTC) versus exchanges – there is no arguing that FX trading is behind the times. According to the Aite Group, only 7 percent of FX trading is conducted algorithmically, compared to more than 50 percent of equities trades.As hedge funds, CTAs and other institutions continue to enter the FX market, it is becoming clear that FX traders must evolve to remain competitive and able to react to rapid market changes affecting FX trading around the globe.  Redefining the FX Trader The...continued

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