Even since people started doing business in foreign lands, exchanging and trading currencies also began. In fact, we can go back to 3,000 B.C., when the idea of money first appeared, and discover that those who were traveling to China or Egypt were exchanging currencies for gold, so they can trade with locals.
Nowadays, trading turned into a way of making money.
Traders are following specific indicators, like global news or market sentiments, as well as economic data and credit ratings, in order to determine what a currency pair can do: go up or down. And technology has already started transforming the way this is done.
Most traders are pictured standing in front of computer screens and checking graphs all day long. Yes, this can be true, to some extent. Still, most trades made on the biggest platforms are actually performed by automated programs.
“Less than half of our traders are people that are watching a particular chart on the screen who then decide to make a very discreet action,” says forex brokerage firm Pepperstone’s CTO, Jason Noorman.
“We do have some traders that trade like that – and they’re very, very good at it – but what we generally see is a greater percentage of traders that use Expert Advisors.”
This is just one example of software able to put trading on autopilot and we’re looking forward to seeing such tools becoming even more advanced in a few years.
What’s next for forex?
Considering the ridiculously fast way technology is advancing and the adoption rate of artificial intelligence and machine learning, there’s no doubt that the forex industry can only grow. And fast!
As a side note, the global forex trading market has an overall value of over $1.93 quadrillion, which is 2.5x the size of the global GDP. Let that sink in for a moment.
However, with technological progress also comes regulatory enforcement. And forex trading, which involves large amounts of money changing hands, is no exception.
“Regulation has increased in Europ and the US and is expected to increase in Australia,” claims Compare Forex Brokers CEO and co-founder Justin Grossbard. “So I expect [the forex market] to grow, but primarily in emerging markets like Asia and Africa.”