FX algorithms now easier to use and tactically much more proficient

William Essex investigates the latest developments with FX algorithms including efforts by providers to develop more advanced algorithmic toolsets with new tactical capabilities that although quick and simple to deploy are functionally much more adept than their predecessors

Sometimes, the most effective way to address a complex question is to start with an easy question. Why do we use algorithms at all, for FX trading and/or execution? Back in the early days (April 2007), Chris Marsh, head of AES Europe, Credit Suisse, said: “There is a mirage of liquidity and you actually face a fragmented, illiquid and opaque trading arena.” Marsh was describing the FX market at the launch of the Advanced Execution Services (AES) FX-algo suite. More recently (December 2013), Simon Garland, chief strategist at Kx Systems, said: “The FX market is still very complicated, very tricky. There aren’t just a few places where you can go to check on liquidity. You have to be all over the shop.” Garland was also arguing for FX algos as an antidote to complexity. Plus ça change, plus c’est la même chose, as they say at FX trading desks everywhere. Algos haven’t so far changed the FX market to the extent that, say, algos’n’HFT have changed...continued

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