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FX, what does real-time visualisation mean and how useful is it?
“FX is a real-time asset class but generally speaking real-time views of liquidity are less useful to an FX business than you may at first imagine,” says Peter Atkinson, head of FX Product Management at smartTrade Technologies, a provider of liquidity management software.
Real-time, high-frequency decision-making is generally performed algorithmically by a machine. Te time-scales involved may typically be in the milliseconds — far too quick for a human to respond to a fast-moving market.
Data anomalies Nicholas Pratt
A new generation of liquidity aggregation technologies and liquidity management toolsets can now assist high performance FX sell-side and buy-side firms to visualise liquidity and therefore accelerate deployment of alpha generating algorithms and optimise the implementation of their trading strategies. Nicholas Pratt explores what factors and FX business drivers are creating demand for improved real-time views of FX liquidity.
V
isualisation has become a big feature of modern day trading systems and as with all trading tools, it is increasingly being
demanded in real time. But, in an asset class such as
Despite this, real-time visualisations do get used in FX all the time, says Atkinson. “Tey can be particularly effective when used to indicate the overall health of an automated FX trading system. A human operator can quickly distinguish atypical behaviour and intervene as necessary. Tis can significantly reduce the systemic risk associated with complex algorithmic trading systems.”
Te human eye can also spot anomalies when data is displayed in a visual rather than a text-based or tabular form, says Atkinson. “Tis is especially useful when a trader has to process large data sets, for example a heat-map displaying bond prices. Tis needle-in- a-haystack problem is less common in FX where, generally speaking, the data sets are much smaller. Having said this, real-time market graphs are used extensively in FX and many day-traders will use interactive graphs for entering orders. FX Hedge funds
april 2012 e-FOREX | 57
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