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High-Frequency Trading is on Dispute

High-Frequency Trading is on Dispute Once Again

High-Frequency trading is often considered as an unethical practice in US and UK as it may lead to risk-free trades before the rest of the market has the time to react. Here are some interesting facts and information about this modern way of trading.

What is High-Frequency Trading All About

High frequency trading is based on state-of-the-art computer technology and internet connections which allow opening and closing trading positions in milliseconds, that’s why we are referring to the millisecond-markets.

Mr Schneiderman Concerns

New York's attorney general, Mr Schneiderman has recently raised concerns that corporations mastering high-frequency trading can benefit from the special conditions provided by stock markets today. These conditions include key market data as volume, pricing and order confirmation.

Furthermore, Mr Schneiderman said "If a firm can detect a large order from an institutional investor - like a pension fund - it can instantaneously position itself on the other side of the trade, driving up the prices artificially,"

Automated Computerized Trading may add Systemic Risk to the Global Financial System

According to BBC, there are several cased when computerized trading led to enormous losses. Here are two similar events according to BBC:

■ In 2012, a New Jersey-based trading firm, Knight Capital, lost close to $440m after a computer glitch caused the firm to execute 150 mistaken orders to the New York Stock Exchange.

■ In May 2010, computerized trading was blamed for the "flash crash" which briefly sent US markets down 5% before the error was discovered.

In a few minutes the New York Stock Exchange plunged, and then just as suddenly recovered again. Share prices in some firms, such as the consultancy Accenture, plummeted to a fraction above zero, while Apple soared to $100,000. For months afterwards, nobody could explain what had gone wrong.

Read more: High-Frequency Trading is on Dispute

New VPS Service by XM (XeMarkets)

XemarketsNew VPS Service by XM

XM has recently launched a new VPS service suitable for Forex Automatic Trading (clients using Expert Advisors). As XM claims, the service is using the latest generation technology to offer features like optical fiber connectivity. What is important is that the physical location of the new VPS service is very close to the XM data center in London. That detail ensures that the service is really fast and thus able to eliminate any trace of latency.

XEMarkets Review

The new XeMarkets VPS service is powered by Beeks FX VPS, and here are some important features:

  • Extra Fast
  • Accessible from anywhere
  • Free under conditions (check below)
  • Online 24/7
  • Eliminates outages due to computer failures and potential power cuts

All XeMarkets clients can gain access to the new VPS service simply by requesting it via the Members Area. The service is offered 100% free to all XM clients who meet the following two requirements:

1) They maintain a minimum account balance of 5,000 USD

2) They trade at least 5 standard round turn lots per month.

Other XM clients not meeting those two basic requirements can still enjoy the service simply by paying 28 USD per month.


» Visit XM | » XM Review 


■ VPS Service by XM (XeMarkets)


US Credit Rating by Fitch Remains at AAA

US ‘AAA Rating’ Affirmed by Fitch bu For US But Negative Outlook for Elevated Debt

Forex Rating 

Fitch Ratings on Friday affirmed the US credit rating at AAA. But the outlook is negative, citing still elevated debt levels that leave it vulnerable to shocks unless more deficit reduction measures are adopted. The affirmation reflects strong economic and credit fundamentals, the firm said in a statement. Fitch said it will conduct a further review of the credit rating by the end of 2013.

According to Fitch:

"The outlook remains negative due to continuing uncertainty over the prospect for additional deficit-reduction measures necessary to reduce government indebtedness over the medium to long term"

Fitch also said the negative outlook reflects "near-term risks associated with the expiration of federal appropriations authority at the end of the current fiscal year (30 September 2013) and in particular a timely increase in the debt limit."

On June 10, rival Standard & Poor's, which cut the U.S. credit rating to AA-plus from AAA in August 2011, revised its outlook on the credit to stable from negative, removing the near-term threat of a downgrade because of an improving economic and fiscal outlook.

Moody's Investors Service holds the U.S. rating at AAA with a negative outlook, a position it has held since August 2011.

The firm highlighted the diversity of the U.S. economy, its "extraordinary monetary and exchange rate flexibility," global reserve currency status of the U.S. dollar as well as the depth and liquidity of its financial markets as underpinnings for the top credit rating.

According also to Fitch:

"Fitch's current assessment is that the economic recovery is gaining traction as the headwinds from private sector debt deleveraging ease. This is underpinned by a pick-up in the housing market and gradual decline in unemployment"

◘ Source: Daniel Bases and Pam Niimi, Thomson Reuters

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