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High Frequency Trading – Its uses in the Foreign Exchange Market


In the everyday world of financial trading and investing, millions of people buy, sell and trade stocks constantly in the hopes that they land on something that is enough for them to start earning steady earnings or at least help them in making profits in the near future. With the help of computer and various other technologies that have now become a vital part of the stock market industry, people do most of the buying, selling and trading online. Additionally, computers have also opened the door for high frequency trading to stock brokers.

To help you understand better, let me inform you that high frequency trading is a trend that has been around since the last few years and has also been on an continuous growth. This type of trading usually happens when computers make stock exchanges at a very high rate of speed.  This rate of speed is usually considered to be in milliseconds or sometimes even less than that.

While trading/buying or selling stocks online, there is also a good chance that your transactions are being performed by computers which most probably mean that you are working with high frequency trading. One thing that traders and investors must realize that with high frequency trading, transactions are typically handled by the computers, while this may make a few people uncomfortable, it will also contribute as an upper hand since this will allows you to organize your data much better.

Some other firms that are known to use high frequency trading besides online trading include big brokerage firms since it allows them to find certain characteristics in the market, nevertheless some other firms also use high frequency trading to get a good handle on currencies and stock moves.

In the Foreign Exchange market, also known as the Forex market, High frequency trading has been widely in use as it allows traders and investors to run several trading strategies with very low margins. A big role here is of HFT as it was one of the most active in liquid currency markets & also prevalent among dominant currencies. Additionally, HFT was also found to have a very profound impact on the Forex market places as it effectively increases and distributes liquidity amongst all market segments. One of the main reasons for such results was due to the foreign exchange market’s intrinsic characteristics of high liquidity and low volatility which provided the right ecosystem for deploying the HFT Strategies.

If you are one of those traders or investors who are looking forward to work with High Frequency trading (HFT) then make sure that you spend some time doing some research as obviously you want to know as much as possible before getting into something new. Once again, you must keep in mind that even though these trades only last a few seconds, high volumes are involved which makes it very much necessary for you to keep an eye constantly. If it is needed, you can learn more about HFT’s at