TRADING SYSTEMS
FX AUTOMATING FX TRADING STRATEGIES
Having written a series of articles on ‘Building Robust FX Trading Systems’ (FX Trader Magazine April 2009 - July 2010), a natural addition to that series is on automation.
In many markets, such as futures, execution is relatively simple. To sell S&P Futures, there is one central market (the CME) and one rate. To sell GBPCHF, there are countless brokers, banks and electronic trading platforms you could use, all with potentially differing rates. You could also sell GBPCHF ‘direct’ or go via
‘the legs’, buying EURGBP and selling EURCHF, or selling GBPUSD and selling USDCHF.
Tis is what made being a market maker on Foreign Exchange desks in the 80’s and 90’s such an art; not to mention trading over voice brokers where you had to recognise the voice of the broker shouting out the rate you wanted to trade on, amongst half a dozen others, in just one currency pair, with the dealer next to you having a similar number of brokers shouting out prices for
the currency pair he traded.
Although the world has come a very long way since those days, FX execution is still very much an art; it’s just evolved.
Today, building a robust and efficient automated trading solution no longer relies on good relationships with your brokers, a keen ear and lightning fast reactions, to hit the best rate before someone else does. Today it requires the mastery of a new set of computing and technology skills.
FX TRADER MAGAZINE October - December 2013 29
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