Forex growth sees increase

Tuesday, 09 March 2010

dbFX, the online margin foreign exchange (FX) trading platform of Deutsche Bank, saw customer numbers increase by almost 40 per cent in 2009, as retail traders looked to diversify their portfolios by investing in FX.

dbFX believes there are five key reasons that this growth in the retail FX market will continue in 2010.

The advantages of FX as a trading asset class is offered as the first reason. For sophisticated investors who are looking to put a proportion of their investments into a diversified asset class, FX is ideal because of its 24-hour liquidity, tight spreads and convenient access to margin and non-correlation to bond and equity markets.

This is closely followed by technology - and the convenience that this technology offers. Investors increasingly want to make their own financial and investment decisions and with the development of sophisticated trading platforms such as dbFX, they now have access to the FX markets from their home or office.  Advanced trading tools (such as trading from charts) and risk management tools (such as stop loss limits) assist investors to trade, manage risk and be better informed.

Trading Forex is also a relatviely familiar discipline in terms of the skills required...transferable skills from other asset classes. The fundamental principles of trading FX are similar to those required for other asset classes. For example, active traders who are following technical and fundamental analysis of the global markets are well equipped to take a view on the direction of the FX markets. These traders are able to diversify their investment portfolios from traditional bond and equity assets to FX, thus spreading their risk more effectively.

The rise of automated trading is showing remarkable growth, too. From accounting for less than one per cent of trades in January 2009, algorithmic trades accounted for a quarter of all dbFX’s trading volume by December 2009. dbFX believes that algorithmic trading - which can be used to supplement self-directed trading - will continue to attract new entrants to FX. 

And then there's the growth of Managed Accounts which are becoming popular with investors who want to gain exposure to FX without having to actually trade themselves. Some platforms offer an end-to-end solution for managers and investors to get full transparency of the trading activity of their account.


Commenting Betsy Waters, director, dbFX said:  “2009 has been another strong year for retail FX with investors continuing to better understand the diversification and potential rewards FX can offer within an investment portfolio. While continued education of the risks and rewards of trading FX remains paramount to the growth of the asset class, we believe 2010 will see the increasing popularity of FX with individual investors.

Not only does technology continue to improve and enhance the client experience, but the growth of trading tools such as algorithms – which investors can buy off the shelf – are attracting a whole new range of potential investors to the asset class.  In addition, the growth of customised solutions such as Managed Accounts offers investors a means to access and leverage the benefits of FX, but without having to actually trade themselves.”

Finally, investors who trade other alternative assets such as commodities have realised that much of the discipline required to trade FX is similar to the fundamental approach they already successfully employ, and therefore is easily transferable to currency trading.”

Launched in May 2006, dbFX is available in multiple languages, has 34 currency pairs and is accessible in more than 82 countries around the world.

Go to www.dbfxarabic.com or www.dbfx.com for more.



For a free copy of the MONEYworks Guide to Navigating Forex Trading, out this month in Arabic and English, please click:
http://www.moneyworks.ae/news/archive/3201002.pdf for Arabic.
or, http://www.moneyworks.ae/news/archive/3201003.pdf for English.