A quick glance at the forex market highlights its exponential growth during the digital age, with this entity now seeing an estimated $5.1 trillion traded globally every single day.
While there are numerous factors that have triggered this sustained growth, there’s no doubt that technology and innovation have played the most pivotal role over the course of the last two decades.
Such evolution has particularly empowered UK and U.S. traders who wish to trade the Asian forex market, which typically operates when the European and North American markets are closed. But how exactly has innovation boosted the forex trading market in Asia?
Technology and Forex Trading – Breaking Down International Barriers
From the perspective of UK and U.S. traders, the opening and closing hours of the Asian forex market have historically provided a significant barrier to entry.
More specifically, the Tokyo stock exchange is accessible between the hours of 00:00am and 09:00am GMT, with only a limited, one-hour crossover available when the European market opens in earnest at 08:00am each morning.
One way in which technology has eradicated this barrier is by introducing the concept of automated and high-frequency trading, which fundamentally enables investors to schedule trades and execute a high volume of orders within a relatively short period of time.
Of course, there are various technologies involved in precipitating this change, with the continued evolution of mobile trading platforms and online brokerage platforms offering a relevant case in point.
After all, not only do these regulated entities incorporate machine learning principles and algorithms that make automated trading both possible and accessible, but they also boast features such as stop-losses that help you to cap and control potential losses without directly manipulating open positions.
This is an important and practical consideration, as it helps traders to strike the ideal balance between leveraging market opportunity and managing risk, while also minimising exposure in the face of fast-changing market conditions.
The Importance of Technology in the Current Forex Market Climate
In the current economic climate, there’s no doubt that the increased accessibility of the Asian market has helped to boost the region’s recovery in the wake of the coronavirus crisis.
There has certainly been increased demand for safe-haven currencies such as the Japanese Yen, for example, while technology has also allowed investors to leverage the relatively strong Hong Kong dollar in the wake of increased fiscal spending within the region.
Of course, technological advancement has also introduced the concept of social trading and networking, which enables traders of all descriptions to replicate successful trades and optimise profits regardless of the economic climate.