The Global Foreign Exchange Market

Introduction

The foreign exchange market is a global decentralised over the counter market for trading the currencies. It further determines the foreign exchange rate in the market and creates value for money across the international markets around the globe (Cliff, 2019). It includes all the selling, buying and exchanging the currencies at current or determined price. The main participant in the foreign trading is the international banks where the financial institutions operate in the global market to serve the customers in a better way with high exchange rate (Mozetič, Gabrovšek & Novak, 2018). It is related to high volume of trading representing larger asset in the world towards high liquidity. In the recent era of globalisation, there is high influence of the digitalisation, where the organisations and financial institutions try to communicate over telecommunication process and share information. This further boosts the foreign exchange market, where the automated system is effective for the participants to share the information and track the exchange rate on a regular basis. Hereby, there is great role of the technological advancement in the foreign exchange market. In the feign exchange market, the interest rate is determined by certain factors which are international parity condition, balance of payment and the asset market model (Abouloula, Habil & Krit, 2018). The purchasing power parity of the individuals in the country, interest rate parity, domestic fisher effects and the international fisher effects determine the value of the currency in the foreign market. Additionally, the balance of payment is also playing a crucial role which determined the capital flow of transaction goods and services across international markets. Exchange rate is also determined by the supply of money and demand for the currency which is also necessary to determine the forex exchange decision made by the participants. The study focuses on analysing the forex trading programmes in order to evaluate the activities in the foreign exchange market as well as the role of the forex robot to increase efficiency of the automated system to manage the transaction of currencies across the international countries (Van Der Plas et al., 2016).

Research aims and objectives:

The aim of the research is to analyse the impacts of the forex trading robots on the trading communities across the globe. The research objectives are such as,

To determine the value of forex robots

To identify the advantages of the forex robots in the international market for doing the foreign exchange activities

To analyse the impacts of the forex robots in the foreign exchange market on the trading communities across the globe

To recommend some suitable solution to develop the efficiency of the forex robots so that the trading communities can handle the ;attest updated technology and make effective decision in the foreign exchange market

Research question:

What is the value of forex robots?

What are the challenges faced by the trading communities across the globe to handle the forex robots in the recent years?

What are the recommended suggestions to develop the efficiency of the forex robots so that the trading communities can handle the latest updated technology and make effective decision in the foreign exchange market?

What are the effects of the forex robots in the foreign exchange market on the trading communities across the globe?

Background of the study:

The study is helpful to analyse the effects of the forex robots in the recent years, where the trading communities is trying to be updated with the latest news and information related to foreign exchange activities. In the recent digitalisation era, all the individuals are educated and they try to perform efficiently by gathering all the necessary and authentic information. Information and telecommunication industry is also expanding where the people can share the information and relevant data related to the foreign exchange activities for making effective decision of exchanging currency, contract or other financial securities (Abouloula & Krit, 2018). There are different trading communities who try to utilise the trading robots in making their decisions rationally, so that the rate of interest is attractive and they can gain high profitability in long run, by investing adequate amount of resources. The trading communities are hereby willing to adopt the latest technology and utilise their Smartphone as well to get daily updates and understand the foreign exchange activities and fluctuations in the currency value in the foreign market. In this regard, the study is helpful to evaluate the software design which supports the trading communities to make effective decision. The study is also effective to analyse the effectiveness of the forex trading where it would also be possible to evaluate in-depth analysis on whether the robot is better than the manual trading activities or not (Zhang, Chen, Zhang & Ji, 2018). Through this paper, it is also easier for the researcher to conduct the research on the price of the software and the robots, as well as identifying worthiness of investing in the robot in long run. Hereby, the study is important to conduct efficiently by gathering the secondary sources of information which further helps to explore clear understanding about the forex robots and its impacts on the trading communities across the international markets (Anantchenko & Kamashev, 2016). Here is division of the level of access in the foreign exchange market, where at the top there is interbank foreign exchange market and which is add up of the largest commercial banks and the securities dealers. The insurance companies, mutual funds, pension funds and hedge funds are there in the foreign exchange market where the investors try to analyse the rate of return on their investment and make effective rationale investment decision for better profit in long run at the specific rate of interest (Qasem & Zayid, 2019). In this regard, the major participants in the foreign exchange markets are central banks, foreign exchange fixing and commercial companies, which are major trading communities investing huge amount in the foreign exchange market. The commercial companies across the globe are interest to invest huge amount for greater profitability and seek of foreign exchange for transaction the organisational goods and services. The central bank is one of the major trading community substantial foreign exchange reserves to stabilise the market and hence it can be stated that the effectiveness of the central bank is considered as stabilising speculations. Investment management funds such as pension funds and endowment are also there to stabilise the activities of the foreign exchange and make effective investment decision for better performance. Retail foreign exchange traders and the non-bank foreign exchange companies are also there to perform in the foreign exchange market and they try to be updated on a regular basis to have proper insight about the foreign exchange performance and understand the rates in the market to make rationale investment decision and predict the future market for financial performance (Legend, 2019). Hence, these are the major trading communities who are playing in the foreign exchange market and there is great role of the technological advancement and forex robot on the activities of the trading communities in the recent era of digitalisation.

Literature Review

Forex robot:

Forex robot is the forex trading software that automates the decision in the foreign exchange market. The expert adviser is included in the robotics which further enhances the decision making behaviour and help the participants to make effective and rational decision for successful investment so that in future the investors can generate high profitability. For placing and managing the trade automatically, it is possible for the trading communities to implement the best robots and ensure successful investment decision. There are different forex robots and fir example Forex Robotron gaining +2922%, Volvox Trader gaining +1,077.3%, Berlinetta Trading gaining +503.6% and Eklatant Forex Robot gaining +701.2%. It depends on the trading communities to choose the best robot as per their cost and time table to make effective investment decision (Angerer, Neugebauer & Shachat, 2019). Becoming a successful forex trader depends on spending time on watching the movements of the forex activities over the period of time and it further enhances the performance of the i8nvestoprs in managing their investment decision successfully. However there is an efficient tool now to assess the market and access all the relevant information in the foreign exchange market, where the participants can understand the fluctuations and the rate of interest in the foreign market to make rational investment decision. In this regard, Forex robot is playing a crucial role in managing the traders and helping them to have great insight of the foreign exchange market (Beunza, 2019). Automated forex trading is a tool known as forex robot, which is basically a computerised program or algorithm which scan the foreign exchange market looking for profitable traders to take advantage of, the robot preset the parameters of the trading strategies for instructing to trade automatically on the behalf of the traders or gives the traders the option to enter into the trade manually by choosing the best possible trading securities. Most of the forex robots use the technical indications to help the profitable forex trading opportunities for the trading communities, where they can make effective trading strategies in the foreign exchange market (Seo, 2019). The forex automated system in this regard is helpful to watch the movements efficiently than a human being and it reduce the burden on the human being to make the trading decisions.

Advantages of the forex robots:

There are certain advantages of the forex robots or the automated system in the market, where the emotions can be kept in check. Auto trading activities manage emotion of the traders and the order will be executed with the numbers of requirement have been meet automatically. Like the individuals, the automated technique of forex does not hesitate or question about the investment decision as the machinery and computerised system are efficient to predict the market movement and fluctuations in the rate of interest (Miles & Cliff, 2019). Discipline can be maintained in the market where even in the volatile market, the rules of the auto trading system stays the same and the emotional factors such as fear of loss or desires to squeeze as much as profit available are removed. Hence, the auto trading system helps to stabilise the market and ensures discipline which is preserved as per the present and future planning. The trading rules can be easily being back tested in order to determine if they are viable. The rules are very precise and they need to be tested on a regular interval for managing the robots efficiently. These activities through forex robots help to have time and money of the trading communities in the market. Consistency is also possible to be maintained in the forex market, where it is possible for the traders to manage disciplines while trading (Haines, 2020). Though the planning is consistent, but unfortunately, there is no such 100% successful trading plans which further may raise cost for the trading communities. They could computing system in the forex activities is also playing a crucial role for the traders to make effective investment decision and in this regard, the trading communities can utilise the cloud based system to minimise the cost of trading in the market (Carapuço, Neves & Horta, 2018). Another major advantage of the forex root is that the trading decision can be diversified and this is effective for the risk averse person to diversify their risks in investment and ensure to mitigate potential loss in future. Risk can be spread over a variety of instruments and creates hedge against losing the positions, computer is much efficient to develop diversify options for the traders to make effective investment decision. Auto trading forex robot is hereby beneficial for the trading communities to handle the risk diversification technique and provide proper solution with best investment plan for generating future profitability. Monitoring the numbers of different trades and accessing diversify trading opportunities are also possible for the trading communities to hedge the risk and make effective planning. In addition to this, order entry speed is improved greatly, where the computerised system is far quicker as compared to the human being to access the market change and invest in the profitable security for gaining higher. Few decisions can make great differences in the robotics system and it further helps the human being to manage the auto generated decision and invest in the profitable securities.

Disadvantages of forex robots:

There are certain disadvantages of utilising the latest technology and the automated system of forex to help the trading communities. Lack of monitoring is one of the main challenges, where the trading communities and the ethical team must monitor and control the robots frequently though it is automated system. The performance of the robots must be evaluated after a given period of time to analyse the abilities to make proper investment derision (Abednego, Nugraheni & Rinaldy, 2018). Here are several issues that may arise due to lack of monitoring process and the issues are such as loss of connectivity, computer crashes, system innovation, and power outage which hamper the efficiency of the robots in making the forex decision for the benefits of the trading communities. On the other hand, there are some decision that may be unreliable in the daily life of the traders and this make the decision vague for the communities which may hamper the investment plan. Failure of the mechanics of the system is another major issues associated with the automated system, where there may arise fait in the system generation. Due to lack of efficiency of the mechanism and computerised programming, the trading communities may suffer from using the robot or the automated system and this may provide unrealistic decision and investment option to the traders (Rundo, Trenta, di Stallo, & Battiato, 2019). On the other hand, there are lack of knowledge and technical skill of the trading communities as well as hacking of the data and information which may raise difficulties to handle the software programming and the automated forex robotics system in the market. It may also hamper the trading communities to make sustainable and prif6table investment decisions (Joshi, 2020).

Impacts of forex robots on the trading communities:

There are no such strategies, tools and planning in the market to guarantee 100% success and it is also applicable for the forex robot. However there are several great forex Expert Adviser robots available in the forex market to support the investors with great decision making behaviour. The trading communities are beneficial by utilising the forex robot, but it needs proper budget for investing in the best robotics system on the internet. It depends on the trading communities to select the best robot available in the internet so that it is possible to guide the traders with effective investment decision (Abednego & Nugraheni, 2018). Consistency and managing the rules of the forex market can be marinated and it also has possible impacts on the trading communities, where they are able to manage the legislations in the market to make the rationale decision. The traders also have the opportunity to analyse the market and spend time on the auto generated forex activities to access the relevant and valid information as well as understand the market fluctuations. It further provides a scope to the traders to understand the fluctuations in the market and rate of interest to identify the currency values, there are different financial instruments which are well acknowledged by the traders where they are able to identify the options such as swap, future, options and speculations to hedge the security risk and invest in diversified securities available in the market (Mozetič, Gabrovšek, & Novak, 2018). It is hereby possible for the traders to assess the market and identify the diversify options in the market for successful investment. It is also effective for the traders to manage their investment decision in a fast pace as the robotics system is an auto generate process and it make the decision very fast. However, there are some negative impacts on the forex robotics system where the individuals decision making behaviour or the manual decision making practice is hampered where the individuals become hesitate to make the decision as they rely mostly on the decision of the automated forex process (Carapuço Neves, & Horta, 2018).

Challenges of conducting the research

In order to conduct the research efficiently, it is necessary to have proper knowledge and understanding in this field of foreign exchange, where the technological advancement can be analysed and evaluated further efficiently to complete the research successfully. The researcher faced some challenges to perform this study and the major challenges are such as language barriers, loss of interest on the topic due to complexity in the research topic, difficulties to collect the information for representing the data and information in the project. The other challenges are related to lack of time management activities and budget constraint for which the research quality may be deteriorated. It is mandatory for the researcher to raise budget for collecting more in depth and appropriate data and information related to the research topic, so that the analysis can be conducted efficiently. On the other hand, other challenges during the research are unseen personal events, not enough information related to forex robots and lack of evaluation and application of the forex robot, which further raise difficulties to manage the project successfully. Inaccurate sources and the issues of citation and referring are there for which the researcher face difficulties to conduct more in doth analysis and evaluation of the research. The foreign exchange market as well as forex robot are complex studies which needs in depth knowledge and skill to evaluate the information and lack of knowledge and practical skill of the research is also another major challenge to understand the topic and fulfil the research aims through effective analysis and evaluation.

Areas of Further Research

The research is effective to develop primary knowledge and skill on the forex robots. The research mainly discovers the effects, both positive and negative, of the forex robots on the trading communities and it further enhance the skill and understanding of the researchers and readers in future. The future scope on this topic is wide, where the researcher will be able to conduct more in depth analysis and evaluated on the robotics in the foreign exchange market. In the recent era of globalisation, there is strong influence of the technological up gradation in the forex market where the trading communities can perform better and his further influence the researchers to conduct more studies in future. The technology related research would be possible, where the researchers will have the option to identify the software and the application of the robots in the foreign exchange market. Thus, there is the scope of the research in the field of technology and robotics which are applicable in the forex market where the trading communities are willing to apply and implement the latest technique to assess the market and access all the market information related to the forex activities. In addition to this, the researchers also will have the option to conduct more research in future which would be related to the application of the forex robots in the market and supporting tactics to the trading communities. It also will influence the researchers to develop further recommendations on improving the forex robots and its application in the foreign exchange market. Hence, there is great scope for the researchers in future to analyse the topic and evaluate the benefits and drawbacks of the forex robots in the foreign exchange activities.

Conclusions

As proper the analysis, it can be stated that, the forex robot is playing a crucial role in managing the foreign market activities and investment decision to support the trading communities in long run. It is beneficial for the traders to maintain consistency in the decision making behaviour, follow the forex rules and legislations as well as predict the market fluctuations for better investment decision. However, there are some disadvantages where the traders are suffering from computer crashes, data hacking and lack of efficiency in managing the activities of the robotics where it becomes risky for the investors to identify the reliable decisions making behaviour in the forex market. The best way to understand the robots for auto generated trading activities, it is mandatory for the trading communities to invest time and cost to choose the best robots in the internet as well as provide proper time to analyse the robotics system and its decision which are helpful for predicting the market fluctuations and make auto generated investment decision. In order to mitigate the risk factors in the forex market, it is mandatory for the individuals to utilise own knowledge and skill of forex transactions and the use the automated forex robot for better management of the investment decision making practice.

References

Abednego, L., Nugraheni, C. E., & Rinaldy, I. (2018). Forex Trading Robot with Technical and Fundamental Analysis. JCP, 13(9), 1089-1097.

Abouloula, K., Habil, B. E., & Krit, S. D. (2018). Money Management Limits to Trade by Robot Trader for Automatic Trading. International Journal Of Engineering, Science and Mathematics, 7(3), 195-205.

Anantchenko, I. V., & Kamashev, A. O. (2016). SOME FEATURES OF TESTING TRADING STRATEGIES FOR FOREX TRADING. International Journal of Applied and Fundamental Research, (5), 26-26

Beunza, D. (2019). Taking the Floor: Models, Morals, and Management in a Wall Street Trading Room. London: Princeton University Press.

Cliff, D. (2019). Exhaustive testing of trader-agents in realistically dynamic continuous double auction markets: AA does not dominate. Proceedings ICAART.

Joshi, V. C. (2020). E-Trading. In Digital Finance, Bits and Bytes (pp. 87-98). Palgrave Macmillan, Singapore.

Mozetič, I., Gabrovšek, P., & Novak, P. K. (2018). Forex trading and Twitter: Spam, bots, and reputation manipulation. arXiv preprint arXiv:1804.02233.

Qasem, Fawaz & Zayid, Elrasheed. (2019). THE CHALLENGES AND PROBLEMS FACED BY STUDENTS IN THE EARLY STAGE OF WRITING RESEARCH PROJECTS IN L2, UNIVERSITY OF BISHA, SAUDI ARABIA. 33.

Van Der Plas, F., Manning, P., Allan, E., Scherer-Lorenzen, M., Verheyen, K., Wirth, C., ... & Barbaro, L. (2016). Jack-of-all-trades effects drive biodiversity–ecosystem multifunctionality relationships in European forests. Nature communications, 7(1), 1-11.

Zhang, D., Chen, J., Zhang, M., & Ji, H. (2018, July). Real Time Writing Reproduction by Robot Arm. In 2018 IEEE 8th Annual International Conference on CYBER Technology in Automation, Control, and Intelligent Systems (CYBER) (pp. 1030-1035). IEEE.