Technological Shifts in Forex Trading Systems: A Spotlight on Algorithmic Advances


Author profile picture

Thanks to technological advancements, the Forex exchange market has come a long way. Robotics and AI have made the process of data analysis simpler than we imagine. From the best algorithmic Forex robots to Forex indicators and diligent Forex signals services, almost every aspect in the space of Forex is evolving with groundbreaking advancements.

The purpose of this post is to highlight the technological shifts in Forex trading systems in light of algorithmic advances. 

How Forex was Traded in the Past vs. How it is Traded Today?

Did you know trading forex is as old as the history of mankind? Even in ancient times, people used to exchange goods and services to provide for their living (Barter). Since there was no currency at that time, they used to exchange food, grains, and other raw material for other things they needed. 

But it wasn't possible to compare the worth of items. To resolve this, people developed commodity money (which evolved into paper and metallic money after some time).

The first Forex Exchange market was established in 17th-century in Amsterdam, which promoted currency trading on a global scale. 

However, Forex trading at that time was very different from what we see today. It was only confined to large companies and governments. There were many limitations, including no proper means of communication and research.

Today, things are very different. There are so many tools and resources available that enable Forex traders to get updates within minutes. The internet has made it incredibly easy to access local and international news and updates. 

You no longer need to be a financial specialist or data analyst to trade Forex as long as you use recent financial tools and resources with continuous evolution expected in the trading world.

Forex robots will continue to improve in terms of market research, forecasting, and data analysis.

Technology is Advancing In the Forex Markets

The Forex market heavily depends on an array of advanced and connected technologies. Whether its algorithmic innovations or online or mobile trading benefits, the Forex market would not be able to function efficiently without these technological shifts. 

There are many Forex robots and automated solutions that work on advanced trading algorithms to reduce the chances of loss. With the emergence of the 5G network, the response time to ping servers will be reduced. As a result, Forex traders would be able to open and close trades quicker.

High-frequency traders can especially benefit from this technology as they work in tight timeframes and handle multiple orders simultaneously. Apart from that, Forex gurus are constantly working on upgrading the trading algorithm that can lead to better results. 

If you're thinking about what kind of upgrades Forex professionals are working on to deliver better results, you've come to the right place. The next section talks about the technological shifts in terms of platform changes and combining multiple programming decisions into one algorithm.

The Main Platform is Shifting From MT4 to MT5

There is no denying the fact that MT4 is widely used by traders and brokers around the globe. But, we can clearly see that the main platform is shifting from MT4 to MT5. It's now a trader's choice as to whether to switch to MT5 or stick to MT4.

One of the reasons why traders prefer to remain with MT4 is that many third-party plugins and Forex robots are not yet accessible on MT5.  But if you closely look at the benefits of the MT5 platform, you would prefer to make a switch as soon as possible.

MT5 provides a very powerful trading system that comprises a range of trader-friendly features, including order accounting, multiple modes of execution, etc.

The platform supports four execution methods - Request, Market, Instant, and Exchange. Also, it offers different analytical tools that can help traders in the process of forecasting and data analysis. 

As far as technical aspects are concerned, with MT5, you can open 100 charts at a time. The charting system supports 21-timeframes. This platform features 80 analytical objects and 38 built-in technical indicators. 

Also, there are four scaling modes. With MT5, you can conduct fundamental analysis without any hassle, making it easier for the traders to predict the price movements of different financial instruments. 

The most prominent addition is the availability of the algorithmic trading feature. This feature lets robots handle trades on your behalf. All you need to do is decide the trading strategy and input relevant instructions. The rest will be handled by the Forex robot.

One of the biggest perks of switching to the MT5 platform is that it enables you to benefit from algorithmic trading as much as possible. You can develop and test different robots to analyze which one of them fits your unique trading style. 

The order execution is also noticeably faster than the MT4 platform. You can also purchase extra services for improving your platform's functionality. The MT5 platform is an all-inclusive platform that enables you to access a full-fledged Forex robot market, an extensive database of strategy developers, and copy trading as well as virtual trading services. 

This increases speed, usability, and technical changes. Technological innovations in the space of Forex trading give rise to better and quicker trading approaches. 

Today, traders do not have to spend hours and hours in front of their computers for market research. Every aspect is automated and supported by the best AI practices. Just choose your strategy, choose a bot, select indicators, sign up for signals service, and you're all set to generate a stream of passive income for yourself. 

Advances in Programming Multiple Decisions Into One Algorithm

Advancements in programming and the inclusion of automation have made it possible for traders to embed multiple trading decisions into a single algorithm. 

In all honesty, today, everyone (a student, someone having a personal business or a 9-5 job) can choose to become a trader (read: profitable trader). Everything is systematized and automated. 

Yes, the research factor is still there, as you can't compromise on the effectiveness and reliability of the tools and resources you choose for your trades. 

But all in all, it has become very easy for anyone with realistic expectations to enter the trading world and draw their fair share with the right use of tools and resources. 

Conclusion (The Systems are Becoming More Effective)

All in all, Forex trading systems are becoming more effective and result-driven with time. The financial insecurities due to the pandemic have caused many people to try their luck out in the Forex world. 

Similar to any other field, the factor of risk is always there. You cannot expect to become a millionaire overnight with Forex trading  But, this is also a fact that algorithmic advances and other technological innovations have made it possible to measure risk and reduce it with the best possible resources. 

Have you ever tried your luck in the Forex Market? Do you think traders should switch to the MT5 platform for better results? What technological products and analytical tools you’re using to upgrade your trading strategy? 

Feel free to share your feedback in the comments below, as it will help your fellow traders make the right decision. Happy Trading!

The Noonification banner

Subscribe to get your daily round-up of top tech stories!