There’s no doubt that the forex market has evolved considerably during the last century, with a number of factors behind this seismic shift. From the variable price of gold to international trade wars, the modern foreign exchange has been shaped by both economic and geopolitical developments on a global scale.
However, technology is arguably the single biggest factor that has driven change in the forex market, with various innovation (particularly during the digital age) playing pivotal in changing how investors trade currencies.
In this article, we’ll explore three seminal technologies and ask how they’ve shaped the forex market.
- The Modern Trading Platform
Until the development of accessible and contemporary trading platforms like Oanda, forex trading remained the preserve of large corporations and seasoned city traders.
This is no longer the case, however, as these platforms have essentially evolved as virtual brokerage sites whilst connecting all-comers to the forex market and removing the traditional barriers to entry.
Make no mistake; these sites offer access to a comprehensive range of markets and real-time news features, along with detailed analytical tools that enables traders to introduce some method to the madness.
They even feature innovative demo accounts, which allows traders to test and hone their strategies in a simulated but real-time marketplace.
- The Mobile Trading App
On a similar note, the last 20 years or have also seen the development of mobile trading platforms, and this journey can be traced back to the formation of the MetaQuotes Software Corporation in 2000.
This is the brand behind the iconic MetaTrader range of trading apps, which have set the standard for mobile forex trading whilst also enabling investors to access all of their account features whilst on the move.
The MetaTrader 4 app means that most widely-used on the market (despite being superseded at least chronologically by the MT5), whilst this iteration remans so popular that many platforms have eschewed their own apps in order to offer this to their clients.
This certainly aids the efficiency of trading, whilst allowing investors to target specific trading session and execute orders wherever they may be.
- High Speed Internet and the 5G Revolution
With 5G networks now being rolled out nationwide, forex traders are excited to see how this innovation will aid their experience online.
After all, 5G is thought to be as much as 100-times faster than 4G, which is a marked improvement that’s almost unprecedented in the upgrades that we’ve seen so far. By offering lower latency, it’s thought that traders will maintain a reliable Internet connection whilst transferring order data at a far quicker rate.
This could definitely be beneficial for day or high-frequency traders, who may be able to increase their profits and work far more efficiently.
However, the question that remains is whether or not these improvements will impact directly on trading speeds or in a way that’s discernible to the human eye.