The Benefits of Trading Multiple Foreign Exchange (FX) Venues on Low Latency Infrastructure

As Foreign Exchange trading continues its rapid growth, new technology has enabled Forex traders to borrow and adapt techniques of High Frequency Trading, also known as automated trading and algorithmic trading, from the equities markets that spawned them.

Foreign Exchange trading, depending on which statistics you believe, is producing average dollar volume of around $4 trillion per day and estimates are that High Frequency Trading accounts for 30 to 50% of this volume. algorithmic trading or automated trading, offers some distinctive advantages for traders who prefer to conduct trading activities with multiple brokers to octane the best liquidity, lowest spreads and fastest order execution. There are additional benefits to trading with multiple brokers, using more than one data source, trading platform or currency pair.

With High Frequency Trading, having more than one broker enables you to detect if a broker is front running, which is, jumping in just ahead of you in order to negatively affect your fill price. Multiple price data streams permit the trader to compare the prices of a particular currency pair and trade with the most advantageous source. Using more than one trading platform permits the user to customize automated trading scripts and expert advisors to play to the strengths of those platforms.

Finally, Foreign Exchange trading needs to have diversification. Trading multiple currency pairs allows the trader to reduce risk by taking advantage of the tendency of correlated currency pairs, such as the EUR/USD and the AUD/USD to trend in the same direction, or negatively correlated pairs such as the EUR/USD and the USD/JPY to move opposite each other.

High Frequency Trading has benefited the Foreign Exchange trading arena as a whole through pushing spreads lower as a result of generating huge levels of buy and sell orders at the milliseconds speeds only possible with modern, high-speed automated trading technology. The individual trader or small trading shop further benefits from the property of algorithmic trading that eliminates emotional influences that cause premature, delayed or simply poor human trading decisions.

High Frequency Trading strategies seek to capture small profits, sometimes thousands of times per minute. Automated trading can examine, consolidate and analyze news events that drive currency prices much faster than traditional sources such as television, radio, standard news feeds or even the Internet.

When combined with a low latency news feed, algorithmic trading can deliver data involving market moving events such as interest rate decisions, inflation figures, industrial production and others in as little as 2 milliseconds, then generate indicators or make trade recommendations to an automated trading system. This translates into something all traders want to gain: an edge.

Foreign Exchange trading, once the exclusive province of governments, international banks and multinational corporations thus becomes available to the individual investor, allowing them to participate against these large entities on equal terms.

Low latency infrastructure combined with multiple brokers, algorithmic trading strategies and extremely fast, low latency news feeds makes High Frequency Trading accessible for Foreign Exchange trading activity to those who otherwise might be left at a serious disadvantage. Even longtime, successful discretionary traders should not turn a blind eye toward the automated trading protocols that will continue to exert an ever-growing influence on Foreign Exchange trading and would further be well advised to explore the possibility of incorporating automated, High Frequency Trading into their Forex repertoire.

Jubin Pejman, Founder of FCM360, is an industry leader for Financial Services Technology Facilitation. FCM360 specializes in establishing high-performance IT infrastructures for Financial companies to gain connectivity to mission-critical exchange markets. Learn more about FCM360's financial colocation services.

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The Benefits of Rebates Partnership Program

I've got the same question everyday about forex rebates. Most of them thought the rebates is not available for retail forex traders. Well, it's hard to explain how easy it is to make money from rebates program and most new trader don't believe it because they didn't know how this thing works. This is why most of us waste this good opportunity to make easy money. Don't waste your money buddy! You can start joining this programs today.

For a starter, I suggest you to get information on how your broker make money. I love it when a forex broker tries to tout their zero commission platform. Actually it's not make sense if know how they operate and make profit. When you open your live forex trading account, usually after that we start to select a pair we want to trade. The spread a usually between 2-5 pips. but some of the pair is higher. Your forex broker has the ability to buy at the bid and sell at the ask. In other words, they take your order and immediately dump your order at bid or ask to make their profit or commission. Your trades in profit or lose, they made profit on both, this is the best if you become a broker.

Okay, suppose we trade GBPUSD with 4 pips spread. Most forex broker's will be able to make $40 spread fee or "commission" for 1 standard lot as soon as trade is complete. Actually, in my opinion this is pretty high. If you are new, this is big problem because we are in trial mode and easier to go wrong in trades, until I educated myself and found out that I am the most important equation in their large profits. If these forex brokers did not have me, they would be out of business, so here we should go to broker agent and get our pay back from that spread fee we just paid. 0.5 pips and above is considered good to me.

Many referring agents offering 0.5 below are just greedy and want to keep more of your trading rebates then they have to. Sometime our trade goes wrong and drag us to a losing month, but if we combine with a rebates we still can get some of our money back and cover some of our lose. So the point is that if you are looking to open a live trading account with a forex broker, you should open that account via introducing broker that offer a rebate programs. Do your trade as usual with a currency pair you like, you should be able to earn yourself a nice little income on the side for every trade that you make.

One of my favorite is InstaForex Rebates, they offer very high rebates up to 1.3 pips per trade. Don't waste this free opportunity to get pay back from your hard work.

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