The forex industry underwent some significant changes and faced a number of real challenges in 2015, challenges that have paved the way for what market participants can expect to be a very exciting 2016. Traders will welcome an ever-increasing shift towards mobile and social trading technologies, as well as the upgrade of trading platforms and the introduction of new payment methods. Brokers, on the other hand, should expect to see further consolidation and strengthening of the industry, with global competition driving technological innovation to even greater heights. In fact, four major trends are poised to dominate the behaviour of European forex traders and the industry as a whole in 2016. FXTM is ready to tackle all four head-on.
Transparent dealing
The defining event of 2015 was, without a doubt, the decision of the Swiss National Bank (SNB) to remove the CHF peg back in January last year. This move impacted all market participants, and the retail forex industry is likely to feel the ripples throughout 2016. The SNB’s decision caused a noticeable shift in attitudes. Traders are now hyper-aware of the importance of regulation and transparency; they are increasingly searching out brokers who adhere to robust risk management policies, employ a team of certified professionals dedicated to handling sudden market movements, and, ultimately, can ensure the safety of their funds.
It was difficult to take away anything positive in the midst of turmoil caused by the SNB’s removal of the CHF peg. Hindsight, however, can be likened to 20/20 vision – a year on and we can clearly see that the SNB crisis actually encouraged brokers to strengthen their controls and risk management measures. In an effort to reduce risk, brokers began to access liquidity from a greater number of providers, creating additional layers of security for clients and strengthening the industry as a whole. As a CySEC-regulated and FCA-registered broker, the provision of a transparent and trustworthy service has been FXTM’s top priority since day one. As part of our ongoing commitment to transparency, we now publish monthly ‘Dealer’s Insight’ reports that detail our execution speeds, slippage and requote statistics.
The defining event of 2015 was, without a doubt, the decision of the Swiss National Bank (SNB) to remove the CHF peg back in January last year. This move impacted all market participants
Over the course of 2016, I expect to see brokers like FXTM – who weathered the extreme volatility that resulted from the SNB’s decision by demonstrating a best practice approach – continue to reinforce their market positions and capitalise on their commitment to transparency. I also expect to see the more established retail brokers pursue institutional business.
Technological innovation
Technology has been a key factor in the rapid growth of the forex industry, and keeping ahead of the latest developments has long been vital for brokers who wish to expand their market share. Expect this growth to intensify in 2016, particularly in Europe where the level of competition among brokers is sky high. Competition is what drives innovation in our business, challenging each broker to offer the best service possible and clearing the way for the creation of advanced trading platforms and faster execution speeds – factors which are crucial for client acquisition and retention. At FXTM, we invest heavily in our skilled in-house research and development team to ensure that we continue to develop reliable, high-tech, client-centric solutions such as the FXTM Investment Program, the ForexTime app, and some of the fastest execution speeds within the industry.
In 2016, I expect to see the mobile trading trend continue to gain momentum; something we have already noticed within our own client base. With 4G mobile broadband available to 79 percent of households in Europe and widespread smartphone and tablet ownership, many European traders already prefer mobile over desktop trading. In response to this shift, the new ForexTime app for iOS and Android provides traders with real-time market updates in an effort to keep them up to date when they are on the go. We plan to implement cutting-edge upgrades for our mobile app and trading platforms in 2016, so that our clients are able to make the most of their
trading day.
Social aspects
Advances in technology are contributing to the creation of new ways to trade and the growth of active online trading communities. Leading the way are the increasingly popular social trading and copy trading platforms. This type of trading tends to appeal to the modern trader’s desire to share his/her success and trading experiences; it enables people to view performance statistics and to choose to copy the trades of traders that match their trading goals. The social aspect means that traders can communicate, learn from one another and enter the world of forex with relative ease.
At FXTM, we have been working on some great investment solutions that satisfy our clients’ demands. In 2015, we launched our Investment Program for strategy managers and investors from around the world. In 2016, although still in its infancy among retail traders, we can also expect to see a growth in the use of big data to create a clearer understanding of the prevailing mood of the market. Traders are expanding their use of data inputs to drive their trading strategies beyond traditional newswires and data feeds and into social media and blogs, which ultimately serves to empower individual traders as it expands the pool of data used to inform
their decisions.
Value-added services
The high level of competition within the European forex market means that, besides technological innovations, brokers will also be looking to provide superior levels of service, both to their clients and their partners, in order to differentiate themselves. Therefore, alongside transparency and competitive trading terms, traders and partners are now looking for brokers who provide value-added services, such as advanced trading education programmes and technical analysis reports, in addition to fundamental analysis, which is now seen as a staple offering.
These services can really make a significant difference as growing numbers of novice traders seek guidance on how to get started in the markets and more experienced traders strive to become more self-sufficient. At FXTM, we are well aware that educated traders enjoy greater success, which is why we have consistently invested heavily in our Forex Trading Education Program for beginner, intermediate and advanced traders. In direct response to the many varying needs of our traders, we provide a host of educational resource channels, including interactive webinars, downloadable podcasts, videos, and daily analysis reports, as well as our popular local training events. We’re looking forward to developing these further.
FXTM in 2016
Well-established within the emerging markets of Asia and the MENA region, we are looking forward to expanding our reach in 2016 by growing further within Europe and tapping into this mature market, offering new and improved products and services tailored to the market’s needs. In addition to our existing EUR and USD accounts, in October 2015 we launched our GBP denominated trading accounts, and 2016 will see us expanding our range of products and services for our Europe-based clients. We will also be establishing a UK office in the heart of London to further support our private and institutional clients within the UK and Europe. Having delivered strong results over the past few years, the UK comes as a natural expansion point and with this move we will be able to leverage the resources of a truly global financial centre. Through our key values of trust and transparency, commitment to innovation and high quality service to our clients and partners, we look forward to further making our mark on the European forex market in 2016