Growth in Forex Auto Trading
set to continue

Forex auto trading, algorithmic trading or automated trading, also known as algo trading, black-box trading or robot trading is one of the major elements driving the growth in Forex activity.

Foreign exchange markets have offered leveraged investors with relatively short investment horizons attractive returns. Second, investors with a longer-term investment horizon have been actively diversifying their portfolios, which has created direct and indirect demand for foreign exchange. Finally, an increase in high-frequency algorithmic trading by some investors, mostly investment banks, has also increased turnover, particularly in the spot market. This is explained in the report entitled Interpreting the 2007 triennial survey - BIS Quarterly Review, part 5, December 2007PDF.

The report was prepared by Gabriele Galati & Alexandra Heath of The Bank for International Settlements (BIS).

[BIS is an international organization which fosters international monetary and financial cooperation and serves as a bank for central banks. Established on 17 May 1930, it is the world's oldest international financial organisation.]

What drives the growth in FX activity? Interpreting the 2007 triennial survey - BIS Quarterly Review, part 5, December 2007PDF. Click here to read the PDF in your browser, or right-click to download it.

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