It appears that major changes are in store for the U.S. Forex industry. The recent CFTC proposal to limit margin to 10:1 has led to speculation as to what will happen with the U.S. Forex brokerage industry. The latest rumors are that several of these brokers may establish themselves as banks and not fall under the jurisdiction of the CFTC. While this may provide exemption from the proposed leverage reduction, these brokers would now be subject to federal banking regulations. This could prove to be very challenging since Congress is looking to implement laws in a financial regulatory bill which would oversee the banks, the products they trade and how they make money.


Forex traders have already begun to seek out non-US brokers that do not limit their ability to trade. While many traders appreciate the security of dealing with a regulated broker, most do not like to be told how they can trade. The first instance of this occurred in the US when the NFA banned trader's ability to hold both a long and short position on the same currency pair simultaneously. Commonly referred to as "hedging", the NFA determined that allowing this type of trade was not in the best interest of retail traders and that the broker benefited by making extra "commissions" entering an opposite trade. What the NFA falied to recognize is that many traders use automated trading systems that employ this type of trading to limit exposure and capture incremental gains. This is akin to entering a "long straddle" in the options universe where a trader buys calls and puts on the same underlying instrument with the goal of profiting when a significant move occurs by closing the losing side and allowing the winning side to out gain the losses of the other trade.


The most recent CFTC proposal concerning leverage has the potential to all but eliminate competition in the US Forex industry as only the large 3 or 4 firms have multiple registrations around the globe that will allow them to operate in other jurisdictions. From a client's perspective, a mandatory reduction in leverage will be much more restrictive than the FIFO (non-hedging) rule as clients will be required to deposit 10 times additional capital in order to maintain their same level and/or style of trading. This in turn will drive U.S. clients offshore, significantly reducing revenues of the remaining 8-10 U.S. brokers resulting in further consolidation that had 30+ participants just three years ago. How is reducing competition and forcing U.S. clients to open accounts outside the U.S. a positive for the U.S. Forex industry?


One thing that has been overlooked in the past has been the standardization of pricing and execution. In the past, traders have always focused on the location of the broker and the respective regulatory body. It is now more important than ever for traders to be using a DMA (Direct Market Access) provider. Brokers that offer such pricing and execution help to alleviate many of the concerns in the Forex industry. If more and more brokers can move to a DMA standard and use a system like Currenex they may find they won"t be always be at odds with those that write the rules.

Latency is defined as the delay in the time it takes for data to travel from point A to point B. In the case of Forex trading, this equates to the distance between your broker and their respective liquidity sources.


Latency tends to be one of the most overlooked aspects of Forex trading. From a trader’s perspective the focus has always been on the front end trading software. However, reductions in latency should be one of the most important considerations in selecting a Forex broker. It is essential that an STP broker that connects to various liquidity sources lessen the time that trade messages takes to reach those sources of liquidity.


The Case for Colocation


As is the case with many businesses, a major key to success is “location, location, location”. Numerous studies have shown that the most effective way to limit latency is to make sure the physical location of the broker’s servers are in close physical proximity to the data source. DivisaFX accomplishes this by locating their servers within the same facility where Currenex hosts their servers. This means that trade messages travel the shortest distance possible and offer clients precious milliseconds advantage over other brokers.


Many algorithmic and high frequency traders take advantage of the improved execution times by hosting their trading system in a collocation with their broker. Through a partnership with TradeSpotFX, traders can now use the VPS (Virtual Private Server) service to reduce latency and maximize the effectiveness of their expert advisor or other automated trading system they might use.


Another benefit of server collocation is security. Financial institutions are required by law to adhere to the strictest levels of security and data integrity. They must also maintain server uptime of 99.99% so numerous backups are implemented to insure uninterrupted trading for clients of DivisaFX.

SAN DIEGO, CA FEBRUARY 11, 2009: Divisa Capital Group announces the release of the Currenex MetaTrader4 Bridge providing connectivity between the popular MetaTrader4 (“MT4”) trading platform and the market leading Currenex trading system.


The Currenex MT4 Bridge facilitates the seamless integration of Currenex liquidity into MT4 and provides real-time hedging and execution through Currenex. You benefit from the superior liquidity and low latency execution that Currenex provides as well as the ability to specifically tailor your price feed using the Currenex Backoffice.


Benefits of the Currenex MT4 Bridge:


• Access to aggregated liquidity- With Currenex you can aggregate liquidity from multiple providers to continuously provide the best bid/offer into MT4.
• Real-time hedging of client flow on the award winning Currenex platform – MT4 trades are hedged in real-time as they occur, reducing risk from aggressive Expert Advisors.

• Fastest Execution – The award winning Currenex platform provides the fastest execution in the industry today. Combined with the extremely low latency Currenex bridge this provides the fastest execution from MT4 to your liquidity providers.

• Handling of partial fills – The Currenex MT4 bridge seamlessly handles partial fills for better execution, faster fills and less slippage.



Features


• Full control and customization of price feed into MT4.
• Full control of how and when trades are hedged, on a per client basis.
• Seamlessly handles ALL MT4 order types.
• Full logs of all bridge transactions and activity.
• Real time links into your back-office systems.
• 24 x 7 support.
• Support for MT5 when available.

Software development companies that produce MT4 software applications for the Forex trading community have become really important to any prosperous business and the sector of business application development services providing groundbreaking products such as the MT4 robot or the expert advisor, is gaining ground on its more known counterparts, such as the entertainment software development services sectors, and others. The field of business application development now offers a truly indispensable leverage which helps the business sector aim better towards business success and prosperity. The process of extracting precious data with the help of specially designed software applications, such as the MT4 robot, Dukascopy robot, or expert advisor, provides businesses with a great advantage over the traditional channels and ways of extracting data, by considerably reducing operational costs both in time and funds.

For anyone involved in the foreign currency exchange phenomenon, better known as Forex, time is of the essence. Great inspiration and a native talent for business are a must for any Forex trader, but now we are all presented with a large number of Forex autotrading tools that are especially designed to increase our profits considerably. Apart from the great potential for profit, Forex trading software makes itself useful in one other very important way. Forex autotrading saves you time. A lot of the tasks that contribute to you spending countless hours in front of your computer each day can now be easily automated with the help of Forex autotrading tools. Those in need of Forex autotrading software applications can use ready-made expert advisors and custom developed expert advisors, generally being offered by large software development companies.