High Frequency Trading and Forex – Are they Compatible?

bit1 - High Frequency Trading and Forex - Are they Compatible?

Now, in the Forex trading and Exchange world, many methods exist on how to use and change the many different foreign currencies available with every Exchange. And since we are talking about Forex and the overall behavior of each crypto exchange and broker at the moment of using any trading strategy, today we are going to talk about a specific type of strategy.

What’s HFT?

The trading strategy that we are going to take a look today refers commonly as “HFT”. This, of course, is short for “High frequency trading” and it has become quite a sensation among the most successful traders and exchangers of Forex, alongside the many other brokers that are trying to figure out how high-frequency trading works and the best appliance of this method.

bitcoin and laptop - High Frequency Trading and Forex - Are they Compatible?

What Are the Problems Regarding HFT?

HFT has been known in the stock market and has become quite popular since then. It wasn’t too long for this trading style to make its way to Forex, where this method was gaining a lot of popularity, mainly it was negative since most of the brokers call this method unfair and that it can cause instability in the market.

These allegations are rather understandable since it is common to see algorithms to take orders quirkier before any potential trader has the chance of seeing the offer. This, of course, can make some disturb in the platform since it can cause a flood in the orders that can lead to confusion between the users.

And for all these troubles, some FX institutions have come to the conclusion of taking actions against any algorithm that can cause any disturbance in the orders. And with these actions, it means that the HFT is in danger of going away in Forex.

But of course, HFT has proved to have a lot of benefits for experienced traders. If you are starting out in Forex you might not know about these processes. Lucky for you, you can contact professional brokers and exchanger in the platform of Forex who can teach you about the business.

What are the Best Trading Platforms for HFT?

Choosing the best Forex trading platform for High Frequency Trading can be difficult.  In today’s technology driven world there are so many to choose from.  But High Frequency trading is unlike any other trading technique, so it is important that you have the proper trading platform to trade on. 

MetaTrader 4 is a popular Forex trading platform for HFT.  This is primarily due to it’s MQL4 computer programming language.  It is easy to use and allows the Forex trader to do anything they want with the platform.  

But, one of the main drawbacks of MetaTrader 4 is that it is clunky and outdated piece of Forex trading software.  No matter how quickly and fast you optimize your trading strategy it just will not be fast enough. 

For this reason we recommend using an API connect and building a platform on the back end.  A Rest API or FIX 4.2 / 4.4 will be your best bet.  These types of programming languages provide traders with the fastest Forex trading possible once combined with a Virtual Private Server.

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