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). www.bis.org
[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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