Sang Lee Managing Partner at the Aite Group
Sang Lee Managing Partner at the Aite Group

Algorithmic trading in FX – charting the voyage of discovery

Sang Lee explains the importance of Algorithmic trading in the fight for market share in Electronic FX.

Over the last decade, electronic trading has moved from a competitive novelty to competitive necessity. While most of the public attention has focused on the rate of electronic trading adoption in the equities market, enormous market opportunities now reside in other asset classes. The emergence of foreign ex-change (FX) as a legitimate asset class has led to rapid adoption of electronic trading in the FX market, sustained by the tireless efforts of various interbank, multi-dealer, and single-dealer platforms to create greater market transparency and support for full life-cycle of a FX trade.In recent months, the FX market has witnessed the emergence of a new trend in electronic trading: algorithmic trading strategies designed to capture market opportu-nities in increasingly automated and fragmented marketplace. This article examines the market reality for algorithmic trading in the FX market, assessing the potential for growth as well as identifying possible pitfalls.IntroductionThe FX market overall has...continued

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