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An Analysis of the Forex Industry In 2018

In 2017, the dynamic Forex industry saw a lot of changes taking place with a major influence on regulation for higher levels of transparency and the surge in cryptocurrency.

The new MiFID II directive which is designed to enhance investor protection by ensuring more transparency into exchange-traded funds, equities, fixed incomes and foreign exchange has put emphasis on the need for tightened control over the forex industry.

With the new directive, bonus programs were prohibited forcing some European traders to adjust their businesses to match the regulators’ requirements while others opted to find other jurisdictions that have no strict regulations to do business.

On the other hand, the cryptocurrency craze was at an all-time high. The digital currency has gained popularity over the years attracting more and more crypto investors globally.

The volatility of Bitcoin and other virtual currencies allows traders anticipate impressive profits that they are unlikely to make on other financial markets.

There has been growth in digital platforms through which traders can offer their clients the opportunity to trade in cryptocurrencies and grow their investments.

Cryptocurrency Integration into the Forex Industry

According to cryptocurrency experts, the blockchain technology is the "digital gold" that will change the course of business over the next few decades.

This incorruptible ledger found in the digital space is set to enhance transactions between parties as the technology is a disruption in the financial world that has majorly improved trading conditions.

Cryptocurrencies are already popularly in use as a means of payment in the short-term. Various industries have embraced the use of the digital currencies with the use of the blockchain technology being appreciated across the sectors.

Cryptocurrencies can be helpful in curbing Money Laundering and the instruments can be used to simplify Know Your Client (KYC).

There is a possibility of the cryptocurrencies being incorporated into the European legal framework to maximize on these advantages as well as increase the list of instruments available for investment portfolios.

Current Trends in the Forex Market

In recent times, there has been a decline in the number of small brokerage firms operating under some quasi-legal schemes as investors embrace more civilized trading. Traders have become more interested in the proprietary technologies applied by companies and the types of products and services availed to clients as opposed to earlier trends where clients were attracted to the number of rebates or bonuses that a company offered.

Recently, trading on different financial markets is possible through the web tunnel after the cropping up of multi-asset cloud platforms.

Through the blockchain, traders are able to share the results of trading charts and trading signals and there has been a rise in social trading services as a result.

This has enabled inexperienced traders or those starting out in the forex market to transact the same way experienced professionals do, and with similar results.

Algorithmic trading is also a current trend in the forex market, where even traders who have no programming skills have the opportunity to create their own trading robots. This allows the automation of routine activities while offering control for some technical aspects.

Regulation in 2018 and the Future of Forex

There has been increased legislative pressure over the past year that has seen the consolidation of market players. The new MiFID II directive has created a whole new level of transparency that has caused local regulators to use a single system to monitor the market.

Clients are more protected as they now have access to information before and after trading and the improved competitive environment offers better trading conditions for investors boosting their confidence in European regulated companies.

Conclusion

The future of forex is bright. There is room for expansion of the European forex market as small brokers operating under quasi-legal systems are ousted to offshore jurisdictions.

The European market is set to attract more clients as a result of improved transparency and it is expected to grow into a strong financial space with consistent requirements and results.

To keep in touch with the latest developments in the forex industry, please check this site.

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