There’s no doubt that trading on the foreign exchange (or forex market) is a particularly viable and lucrative pastime in 2023, and one that generates more than $6.6 trillion in daily trading volumes.
This showcases a marked increase from the $5.1 trillion reported six years ago, with this rise driven primarily by concepts such as automated trading, the emergence of FX robots algorithms and the role that brokers have played in making such technologies more accessible.
Even more recently, AI and concepts like machine learning have become increasingly prevalent in the forex space, driving incrementally higher trading volumes and making it easier for traders to place a higher volume of accurate trades in a short space of time.
But what precise role is AI playing in the FX market, and is the rise of automated online trading creating a more pressing need for VPNs?
AI and Forex – A Technological Marriage Made in Heaven
Let’s start with the basics and what we mean by AI. In simple terms, this is a broad and sweeping term that discusses a broad range of innovations and applications, while it supports a burgeoning market that’s expected to grow by a staggering 20.1% through 2029.
The two central components of AI are machine learning and predictive analytics, with the former leveraging algorithms and advanced computer programs to identify patterns in huge and even unstructured swathes of data (such as those accessible through social media).
When these increasingly large and broad datasets are analyzed in real-time, AI software can help to identify otherwise invisible trends and unlock the door to intuitive, predictive analytics. These help traders to operate more effectively over time, even when processing large volumes of orders in a short space of time.
Throughout the year, there has been the gradual evolution of automated and AI-powered trading programs that have underpinned the huge and marked spike in market participation, with some estimates suggesting that as many as 90% of all FX trades are now powered by FX robots.
Has the Application of AI and FX Robots Changed the Forex Market?
Ultimately, AI has already begun to change the financial market and trading landscape, by making high-volume and automated trading more accessible while further leveling the playing field for aspiring and part-time traders.
In the next section, we’ll take a closer look at precisely how AI has changed forex trading across the globe:
· #1. The Use of Automation: We’ve already spoken about automation, which plays a key role in underpinning short-term and speculative trading strategies like day trading and scalping. Put simply, you can leverage smart automation to optimize the amount of orders that you execute as a scalper or when spread betting, with these strategies enabling you to leverage short-term market volatility and price fluctuations to your advantage. AI has made this accessible to a huge selection of traders, while aiding the analysis of complex datasets and the delivery of real-time analytics.
· #2. Improved Risk Management: If we accept the fact that AI helps to unlock larger and more diverse datasets from both structured and unstructured resources (such as social media), it’s obvious that technology has led to improved risk management over time. There’s no doubt that sophisticated and highly evolved AI tools can help you to better calculate and identify market risks, while further optimizing your chances of achieving a viable return. This immediately reduces the risk of loss while simultaneously boosting your individual profitability.
· #3. Using AI in Your Trading: Despite the overt complexity of how AI and machine learning works in practice, you won’t have to develop your own algorithms to leverage the technology. Instead, you can access such tech through your online forex brokerage site, which features its own bespoke algorithms and forex robot software. This unlocks enhanced data forecasts without requiring you to do any of the heavy lifting yourself, even when dealing with a high number of short-term trades.
The Bottom Line – Is a VPN Important When Trading Forex and Using FX Robots?
As we can see, there’s been a distinct rise in the popularity of FX trading and the execution of automated orders, using AI-driven algorithms and forex robots.
With these trades now widely carried out online and increasingly on the move, the question that remains is do you need a VPN for PC to trade the markets safely?
If you’re asking, “what is a VPN?”, this describes a virtual private network that establishes an encrypted tunnel between your device and a remote server. As a result, your web traffic and transaction data appear as an indecipherable string of code to third-parties on your network, including hackers, ISPs and network manager.
A paid VPN will also mask your IP address and physical location, minimizing the risk of you being targeted by malicious malware or ransomware attacks.
This type of tech is best deployed when surfing vulnerable and unsecured public networks, and if you regularly trade forex or deploy FX robots while on the move, downloading and installing a VPN may create a much needed and additional layer of protection.
You can compare the broader market to see which paid VPN client is best for, with a broad network coverage and robust safety protocols particularly important criteria.
This is definitely to be recommended, however, especially if you deal in large or a high volume of forex orders while on the move!