e-FOREX: Next generation FX analytics: Bringing transparency and more to the FX execution process

Electronification has steadily increased in FX over the years, and has spawned new stakeholder needs. Proving commercial viability and increasing efficiency are two examples that have led to data analysis becoming a critical portion of the FX execution workflow.

Paul Lambert (CEO, New Change FX) stresses the importance of the unbiased standard or ruler to ensure the data firms receive is independent and lacks biases. “If the ruler isn’t independent, then you cannot trust your results to be objective,” he says. “For example, if you are using data from inside your trading ecosystem when LPs are skewing their prices, as they often will to reflect their trading view, your ruler is changing, and you will embed bias. For unbiased measurement, you need to use an exchange rate that your activity isn’t affecting.”

Lambert explains how New Change FX assists its clients. “The NCFX mid-feed is designed to be the unbiased ruler because it is not part of a trading platform,” he says. “The possibilities for measurement expand enormously once you can triangulate your own available spread and midrate, your micro price, your available volume, and prevailing market conditions (volatility, update frequency, etc.) To measure your outcomes, you need the data from inside your system and measure them against the independent benchmark from outside the system. It is from this information that the trader can create an execution methodology for each trade.”

Read the full article on the e-FOREX website here: Next generation FX analytics: Bringing transparency and more to the FX execution process - e-Forex .