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RETAIL REPORT: Three Retail Trading Trends You Need to Know

Traders Magazine Online News, February 20, 2019

Mohsin Siddiqui

The forex trading industry has come a long way since its infancy, and today a staggering USD5 trillion in currencies changes hands around the world each day. As such, the FX market remains highly attractive to smart investors, eager to take advantage of price movements and volatility. However, the FX market is also influenced by several key factors, from political and economic events to changes in regulatory requirement and even technological developments. Given this, itís essential that retail traders stay abreast of industry trends in order to gain an edge in their trading strategy. I believe three key trends have emerged in the last year.

Brokers are becoming more transparent

In recent years, regulators all over the world have turned their attention towards ensuring greater investor protection in the retail trading industry. For example in the EU, ESMA recently announced a new policy statement for retail clients that bans binary options, implements leverage caps, and requires brokers to introduce margin closeouts that provide negative balance protection, among other things. This statement sends a clear directive that brokers must create a fair and transparent trading arena, and is indicative of the fact that investors want to trade with a broker who has their best interests at heart.

In todayís market, traders expect complete transparency, not only in terms of the liquidity pool but also in terms of pricing and commission structures, as well as risk management models. More importantly, they want to know their capital is safe and well protected.

As such, many brokers are working to improve transparency in their organization. It is important to be transparent about all aspects of a business, from pricing models to risk management systems. This level of transparency provides clients with the security they require in order to trade and is a necessary part of being a trusted operator in the forex space.

However, transparency goes way beyond simply being clear about pricing, and traders are also looking for ways to improve their strategy and actively learn the tricks of the trade. They want access to the necessary insights to help them identify opportunities while protecting their portfolio from risk. Thatís why itís so important that brokers offer an in-depth education program and a suite of tools to help clients better understand the markets.

Real-time data and access to information are critical

In a world where data is king, it comes as no surprise that traders who have access to real-time information are better placed to make informed decisions when it comes to their trading strategy, however for many years this remained the exclusive domain of institutional traders. Now, thanks to technology, a host of advanced charting applications, market indicators, sentiment analysis tools and economic overlays exist, providing clients with greater clarity over the markets often in real time, placing them on a level playing field with the dealing desks, creating a competitive edge.

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