Innovation in technology over the past few years has managed to cause a stir in the evolutionary stage of the traditional instruments involved in the financial markets for traders.
But first, let’s get an idea of who these retail traders are.
A retail trader is someone who buys and sells securities for their own account. He does not represent any organization and is also known as an ‘individual trader’. These traders want to manage their trade and amplify it using the latest technology. Cloud computing is one such technological innovation that has seen good adoption amongst traders in recent years.
What is cloud computing?
The heart of cloud computing is rather simple. Companies that provide cloud services, make data and applications easily accessible over the Internet from practically anywhere. All you need is a good internet connection.
According to research conducted by Forrester, the cloud computing market is anticipated to grow from $58 billion in 2013 to more than $191 billion by the year 2020.
Cloud computing is bifurcated into 3 services
Infrastructure as a service encompasses delivering everything from storage to servers to operating systems as part of an on-demand service through an IP-based connectivity. Traders can opt out from purchasing software or servers and instead obtain these resources in a subcontracted on-demand service. An example of a cloud computing service plan has been mentioned below.
A costing example of a cloud computing service provider
Now that we have covered an example of cloud computing in terms of the pricing aspect, let’s look at what is in store for a retail trader to opt for this technological innovation.
Why are retail traders opting for it?
The concept of cloud computing is an on-demand self-service Internet infrastructure where you ‘pay-as-you-go’ and only basically use what you need. Retail traders are slowly venturing into this form of digital technology to execute their trading strategies based on the convenience of the cloud.
Due to the convenience of cloud, traders can use the cloud service to check new trading strategies, backtest and run-time series analysis along with executing trades. With cloud computing, instead of building the data center infrastructure themselves, they can test the strategy as long as they need to and if it doesn’t work out, they can shut it down and terminate the payment for the same.
This concept of renting space and time over the cloud is far viable than creating one’s own hardware/software infrastructure. This same concept runs in trading related software – SaaS that a trader can use and run on demand. Analytics, research and testing of trading strategies are reasons why retail trading is migrating to the cloud.
Cloud Computing in the Forex Market
The Forex market for the trading of currencies is an Over the Counter (OTC) market. This market is open 24 hrs and 5.5 days a week where currencies are traded via computer networks between traders around the world.
In a global market that never sleeps, how are Forex traders leveraging the cloud services? Forex traders with automated trading systems and EAs are putting them on a broker’s cloud or with an independent Virtual Private Server (VPS) company. Let’s take the FXDDCloud trading system as an example.
Forex’s FXDDCloud system stores trading information within their computing infrastructure. The outcome is that the platform operates rounds the clock even when the computer is off. It also allows:
- Access to the trader’s platform from any computer without downloading it
- 24/6 secure hosting of the trader’s EAs and platforms
- Trade Forex on a Mac
- Protect your MetaTrader 4 trailing stops
- Efficiently run multiple strategies with lowered latency
- Streamline communication with a built-in chat feature
- Interact with FXDD through social media integration
- Read the latest ForexLive information
There are other cloud-based trading services and platforms available for traders.
Click here to know more about cloud-based foreign exchange (Forex) trading services and platforms.
In conclusion, the cloud is not an industry or a category, it is an ecosystem. Retail traders are switching to cloud computing because it helps cuts costs, maximize resources and increase efficiencies thus resulting in phenomenal outputs in their trading strategies. So let’s wait and watch for it’s going to cloud trading all the way soon – quite literally!
If you’re a retail trader or a tech professional looking to start your own automated trading desk, start learning algo trading today! Begin with basic concepts like automated trading architecture, market microstructure, strategy backtesting system and order management system.