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FX automation a
gradual refinement
of processes; now
making headway
into execution
Panelists at TradeTech FX Europe extol virtues of
automation for FX trading and how trading processes
will have to adapt to keep up.
T
he automation of
foreign exchange
markets is continu-
ing apace and focus
is now starting to
shift towards how
it affects trading
decision-making.
Panelists at this
year’s Trade-
Tech FX Europe
conference said that
while automation is
now widespread in the
industry for the benefits of cost
reduction and increased efficien-
cy, it is also becoming a more
viable tool for optimising
execution.
“There are various ways
that we can think about automa-
tion; there is rule-based execution
or straight-through processing,
building that low-touch execution
desk,” said David Shack, VP, FX
technology at Fidelity Investments.
“Another aspect is thinking about
40 // TheTrade // Fall 2019
how we can take a more complicat-
ed approach to deciding how and
when to trade, looking for better
trading outcomes by being able to
take a more complicated process
and run that more consistently
across the desk, whether it is by
picking the right time to trade or
the right strategy to trade.”
This sentiment was echoed by
Jil Sigelbaum, head of FXall at
Refinitiv, who said that while the
majority of automation is focused
on the pre- and post-trade side,
citing workflow management and
order structuring to achieve best
execution, it is “at-trade that is
evolving most these days.”
“That’s where the majority of val-
idation is coming into play, because
we have more real-time data to use
to come up with intelligent ways to
trade,” she said.
Sigelbaum also raised the issue
of the role of the human on the
trading desk where automation is
taking hold, saying that there needs
to be a level of trust from traders
towards the automated systems
they are using, particularly for
execution, and that will take time
to develop.
“Over time there will be less
traders and machines will take over
some of those tasks, but it won’t
be complete, there will always be
exceptions. We see it happening at
the banks first; they have already
been moving a lot of their trading to
machines and I think that in five or
ten years from now we will see that
in every aspect,” she commented.
There was a common consensus
among the panel that the role of the
FX trader will have to evolve in the
future alongside increasing levels of
automation, with Ruben Costa-San-
tos, head of multi-asset class ana-
lytics at Virtu Financial, saying that
traders will be given opportunities
to spend more time with data and
analytics to optimise their trading
strategies as a result, while global
head of foreign exchange electron-
ic trading at Bloomberg, Tod Van
Name, said that automation pre-
sented opportunities for improving
scalability and optimisation of all
trading processes, including the
human element.