Technology is one of the main factors that has shaped a qualitative shift in the world of foreign exchange trading. Its impact is not only limited to speed of implementation, but extends to improving access and providing more accurate information.
- Accelerate implementation:
With the development of technology, trading processes have become faster and more efficient. High-speed networks and instant execution technologies ensure that trades are executed within seconds, enhancing profit opportunities and reducing risks.
- Market access:
Thanks to technology, traders have the opportunity to access the foreign exchange market via electronic platforms around the clock. This provides greater flexibility and allows traders to exploit trading opportunities at any time.
- Automatic analysis:
Providing automatic technical analysis through software contributes to facilitating the decision-making process. Algorithms and robots can analyze data quickly and accurately, providing opportunities to explore patterns and market trends.
- Machine learning and artificial intelligence:
The use of machine learning and artificial intelligence contributes to improving the ability to predict market movements. These techniques allow huge amounts of data to be analyzed effectively to achieve accurate results.
Financial technology is the comprehensive merger between both financial and technological fields, and it has changed and is changing how people deal with financial markets at the present time, as this technology simply allows the public to control their personal banking matters and investments directly through the Internet and their own devices, leading to expansion. There is a significant increase in the use of digital wallets of various types as a new alternative to paper money. Currently, and without knowing it, you are already using financial technology tools on a daily basis, which is represented by your bank application, electronic payment tools, booking tickets or even paying bills.
The impact of technology on Forex trading
Technology has become deeply ingrained in the Forex market, and although beginners to Forex trading may not notice it, both technology and Forex have developed in parallel, and as a result, millions of ordinary people have access to trading tools and methods that were only available to elite traders. in the past
impact of financial technology on Forex trading applications and platforms: If the financial technology fields had not developed in this way, field of Forex trading would still be exclusively available to a very small group of people, including traditional trading communities. But nowadays, thanks to technology and its advancement, Forex trading has become available to all people, and it has become possible for anyone to start trading directly from their couch at home without even moving. Thus, we discuss together some examples of how the advancement of technology has affected the trading market:
- Fast registration of accounts and quick documentation: In the past, opening a Forex account was difficult, as it required documents that had to be manually checked, but after the arrival of automation and artificial intelligence technologies to the Forex market, opening a Forex account has become easier than ever before! The submission of the required documents is now done electronically, with the possibility of examining them by artificial intelligence and opening the account in a very short time frame
- Improved trading tools: Technology has contributed to facilitating and improving Forex trading tools and making them more effective, in addition to reducing the difficulty of dealing with them by traders at all levels, which directly contributes to increasing effectiveness of trading and its operations. Currently, Forex platforms allow transactions to be carried out in real time, which is very useful as Forex trading often depends on fast movements to benefit from price differences.
The impact of technology on the growth of algorithmic trading strategies in Forex
Perhaps emergence of algorithmic trading in the Forex trading market was direct evidence of huge impact of the areas of financial technology in this market that continues to rise. Algorithmic trading operations depend on the implementation of trading operations that have been programmed and automated in advance, relying on instructions that are set through Forex account itself, which It includes a large number of variables, including trading volume, quantity, timing, and many additional mathematical equations.
We can describe automated algorithmic trading as having completely changed the Forex trading market. Currently, most Forex traders tend to use automated trading in one form or another, and perhaps they do so sometimes without knowing it, as most Forex trading platforms currently allow a large number of pre-prepared trading operations. Which works automatically. Besides, a number of necessary trading techniques rely on these techniques, such as stop loss and take profit orders.
Algorithmic Forex Trading Strategies: significant growth in the field of financial technology in the Forex market has led to the emergence of a large number of algorithmic trading strategies, some of which have become more popular than other famous trading strategies, and these are some of the processes:
- Scalping strategy: This strategy relies mainly on trying to achieve gains by trading on the small price differences that occur between currencies in time periods estimated at seconds. There is no doubt that using algorithmic trading with this strategy is very appropriate, as it relies mainly on opening trading deals in huge numbers throughout the day.
- Trading on the news: The strategy of trading on the news is currently considered one of the important strategies, simply because of the abundance of influential news in the areas of finance and business, such as the Central Bank raising interest rates or other things.
The impact of technology and technological progress on the Forex trading industry
The rise of new platforms, easy online payments, and commodity trading has significantly expanded the Forex market. In 2019, daily trading volume reached $6.6 trillion, a notable increase from the 2015 figure of $5.1 trillion, as reported by the Bank for International Settlements. The Forex sector experienced substantial growth in 2021, marked by significant investments and records. Visa made a powerful entry, sealing a $929 million deal with the currency trading payment platform CurrencyCloud, according to the KPMG FinTech Pulse report.
Perhaps the huge innovations in the field of financial technology related to Forex trading are:
- Facilitating access to the Forex trading market: Financial technology, along with technological development in general, has made access to the Forex market easier than ever before, through two main factors, the first is access to the Internet and its technologies in general, and the second is Ease of engaging in the Forex market without having to go through complex and difficult procedures.
Chart expert Vu Hingoto highlights that technology has unexpectedly empowered traders, enabling them to practice and monitor trades anytime, anywhere, thanks to the Internet. This enhanced flexibility has significantly increased freedom and ease for traders. The proliferation of rich content about the Forex market has further emphasized the importance of these features.
- The development of computational processing technology: Servers and systems have become more powerful and fast, which has allowed for processing larger amounts of data in a short time and with great efficiency, which ultimately led to a great dependence on technological financial services, which are now able to provide the needs of millions of users at the same moment.
