How the future of technologies may impact Forex trading
In short, optimism must prevail, and traders should welcome the benefits of technology with open arms.
While discussing forex trading, traders often emphasize the volume, liquidity, and volatility of the forex market. No doubt, having an estimated worth of $1.93 quadrillion, the forex market has a lot to offer. However, the role of technology in modern-day trading is undeniable.
The forex market depends upon a series of connective technologies. Without technological advancement, traders would not have seamless access to the forex market. This piece discusses the underlying technology behind the forex market and its significance in day-to-day trading.
The implication of Technology and Online trading
Over time, the role of technology in online forex trading has been commendable. For instance, Artificial Intelligence (AI) has been very successful in the automation of trades. It has not only reduced the effort but also exceeded human capacity in data interpretation and trend identification.
Similarly, technology such as Cellular networks enables world-class trading platforms to offer their clients accurate real-time trading exposure as indicated on the review on Swissquote, one of the leading Switzerland brokers.
Although there is a lot to talk about technology, we will focus more on cellular broadband technology at the moment.
Since the forex market runs in different trading sessions, clients can access it round the clock. Traders don’t need to sit in front of a PC, keeping an eye on the forex charts all the time.
Instead, cellular broadband technology has brought the forex world into the reach of your palm. You can access the market using your mobile phone anywhere, anytime, and execute real-time orders and optimize your profits.
The Cellular Network Technology & Different Generations
In recent years, the use of mobile apps has grown significantly. More traders prefer to access the forex market via mobile trading apps, including MT4, MT5, and other customized mobile trading platforms. Cellular networks have served as Wi-Fi strength signals connecting traders to the forex market seamlessly. Not to mention, the 5th generation of cellular broadband technology is yet another phenomenal addition to the existing tech industry.
Before the 5G was introduced, 4G offered traders robust connectivity and reduced latency. While the 4G network improved the download and upload speed significantly compared to the 3G networks, it also offered a huge leap from the 2G technology that enabled users to connect via phone call and exchange messages wirelessly.
How 5G Is Likely To Impact Forex Trading
While the technology is still in the phase of regular up-gradation, it might not be wrong to say that the previous iteration of the 4G networks was just an incremental improvement. However, the 5G comes with an exception. Technology experts believe that a 5G network will increase the speed of transactions by 20-times higher than the current speed.
Having that being said, traders may think if the 5G will make any difference? Do traders need to have more speed to download MT4, MT5 or to trade more efficiently. The simple answer is no. The prevailing 4G networks are sufficiently fast to offer traders uninterrupted access to the forex market.
However, the 5G networks will reduce the time lapse needed to ping the servers earlier. Resultantly, traders might observe some improvement in order execution rate. More importantly, 5G will offer an added benefit to high-volume traders executing multiple positions within strict time frames.
While 5G can effectively reduce the server’s ping time from 100ms to 10ms, it can certainly offer high-volume traders an edge over other competitors.
The future of forex
Since technological advancement such as 5G, Artificial Intelligence (AI), and Machine learning seems to be an ongoing process, the forex market is poised to grow further.
However, technological growth might also be subject to statutory regulations. The forex market is even more sensitive to various restrictions imposed due to having a large sum of funds in circulation.
According to Justin Grossbard, the Co-Founder and CEO of compareforexbrokers.com, the regulations have already begun to tighten in the U.S. and Europe. Australia is also looking forward to introducing further restrictions on the currency market.
However, forex trading will continue to evolve in emerging markets like Asia and Africa, he added.
Ever since Singapore was ranked as the world’s third-largest forex market, the industry seems to have started reaping the fruits of technological advancement. According to Grossbard, more brokers will set up their offices in Asian and African regions and integrate technology to serve clients in their local languages.
While technology has been a blessing in nearly all specs of life, it also opens doors to technological abuse, such as unauthorized online intrusion and financial frauds. However, the concerns have always come up with solutions. In short, optimism must prevail, and traders should welcome the benefits of technology with open arms.