If you were asked to imagine a contemporary Wall Street share-dealing room, the vast majority of you would probably envisage a testosterone-fuelled bear pit packed full of traders screaming at the top of their lungs.
The financial market has changed considerably since the 1980s, however, with the pace of technological advancement and innovation having ushered in the age of online trading. As part of this evolution, these virtual platforms now provide a comprehensive range of brokerage services, whilst they also connect investors to a diverse range of markets.
Not all trading platforms have been created equal, however, as some are underpinned by relatively slow algorithms that struggled to follow assets in real-time. In this post, we’ll explore this further whilst looking at how evolved and high frequency trading platforms can broaden the market for traders.
What is High Frequency Trading and Why is it Important?
In many ways, high frequency trading is central to the premise of successful online trading, as this leverages advanced algorithms that are characterised by rapid speeds and high turnover rates.
Not only this, but those who are skilled in the art of high frequency trading also utilise ultra-fast fibre-optic data connections to create a network of systems and modern-day stock exchanges, which in turn affords them a competitive speed advantage over many of their rivals.
Whilst this advantage is defined by milliseconds, this makes a significant difference in the financial market as it enables traders to see other buyers’ orders before they’ve been fully executed.
With this in mind, it’s clear that any successful high-frequency trading strategy relies at least partially on innovative and highly evolved online platforms.
After all, this type of platform enables traders to execute a slew of orders efficiently and in real-time, whilst it also offers a number of additional benefits that can inform your decision-making.
What to Look for in a High-frequency Trading Platform
Whilst understanding the importance of evolved and high-frequency trading platforms is one thing, however, identifying the best broker to suit your needs is far easier said than done (especially given the competitive nature of this marketplace).
One of the first things that you need to look for is the range of markets accessible through the platform, along with the underlying algorithms and the capacity for multiple orders simultaneously.
You should also consider whether a site’s algorithms are quick enough to follow assets and price movements in real-time, especially if you’re active in the forex market and reliant on the fluctuation of currency exchanges. Established platforms such as Oanda are arguably the best in this respect, and you should always tailor your choice of trading platform to suit your preferred asset classes.
Platforms like Oanda are also effective as they offer comprehensive news rooms and analytical suites, which in turn allows traders to identify the most seminal live and historical trends that impact on their market.
Similarly, they also offer access to mobile trading hubs such as the MetaTrader4 (MT4), which is widely established as the best-in-class in the current market. The MT4 also provides real-time access to the forex and similar markets, whilst its slick interface also allows for rapid and high-volume order executive according to your needs.