2022/9/28 0:23:29 read: 13
The focus on data is at the heart of the foreign exchange trading process. At the recent FX Market Structure 2022 event, sponsored by the Tabb Forum and The Full FX, speakers emphasized the importance of data in trading decisions. In addition, recent changes to the FX Global Code of Conduct may increase transparency in the use of algorithmic trading and TCA. The following are some key benefits of using data in FX trading.
One major advantage of forex is that its concept is very simple, making it ideal for a novice to learn algo trading. Moreover, the data that a forex or equities algo trader uses for backtesting is readily available for free. It also offers free access to decades of reasonable quality tick data. Furthermore, some brokers even offer tools for aggregating data. These tools can improve the performance of an algorithm. Nonetheless, individual traders have very little chance in foreign exchange, as they are competing against forces that are infinitely greater than their capital.
In 2001, IBM researchers published a paper at the International Joint Conference on Artificial Intelligence in which they showed that two algorithmic strategies were consistently outperforming human traders. These algorithms were called MGD and ZIP, and were modified versions of the GD algorithm. The GD algorithm was invented by John Dickhaut and Steven Gjerstad in 1996 and the ZIP algorithm was invented by Dave Cliff at HP.