To go faster, data must travel through the air. The corridors between Chicago and New York and New Jersey, and between London and Frankfurt, are bristling with efficient microwave and millimetre-wave links. An even more efficient network of lasers — based on military technology for in-flight signalling between aeroplanes — has been installed to link the New York and New Jersey as well as the London and Frankfurt financial exchanges 1. Next up may be hollow-core fibre cables, through which light would travel in a tiny air gap at light speed.
Trading firms speculate about a fleet of balloons or uncrewed solar-powered drones carrying signal repeaters to support a network of links across the oceans. In a decade or so, firms may even communicate using neutrinos, which travel at the speed of light and can go through obstacles, including Earth. But some firms claim that uneven access to extreme speed erodes trading fairness. And system-wide failures occur when algorithms interact in unforeseen ways — such as in the 'flash crash' of 6 May , when the Dow Jones Industrial Average fell by the largest daily amount ever within minutes see 'Flash crash'.
No one knows when a similar event might spill over into global markets. Avoiding these risks will require intensive research on how markets work — as complex ecologies of interacting algorithms — and how countermeasures could avert disasters. High-frequency trading relies on fast computers, algorithms for deciding what and when to buy or sell, and live feeds of financial data from exchanges. Every microsecond of advantage counts. Faster data links between exchanges minimize the time it takes to make a trade; firms fight over whose computer can be placed closest; traders jockey to sit closer to the pipe.
Communications technology is a limiting factor. Fibre-optic cables carry the most data, but do not give the speed required. The fastest links carry information over a geodesic arc — the shortest path on Earth's surface between two points. So line-of-sight microwaves are a better option; millimetre waves and lasers are better yet, because they have higher data densities. Open-air communications systems are prone to weather disruption.
Anova Technologies, a network provider for trading firms headquartered in Chicago, Illinois, has augmented its New York laser network with millimetre waves to overcome rain, fog and snow. But microwaves and lasers cannot be used over long distances without repeaters. They attenuate quickly in the atmosphere and do not curve around Earth. Some economists question the worth of such investments.
Joseph Stiglitz, a Nobel laureate in economics, is among those who argue that rapid trading is socially useless 2. Worse, speed may impede proper market function. The traditional purpose of financial markets is to pool diverse information from many people to channel investment resources.
That requires trading based on insight, depth of study and patience — all foreign to the high-frequency algorithm-based system 2. Fast trading has pros and cons. First, it gives markets 'liquidity' — it makes it easier for investors to find trading partners at reasonable prices.
Liquid markets benefit trade in the same way that free-flowing traffic helps transport. Such markets tend to have low 'spreads' — the difference between the prices at which one can buy or sell a stock, which reflects the fee that dealers demand and thus transaction costs for investors. As high-frequency trading has grown over the past decade, spreads in many markets have fallen, making trading cheaper 4.
Even so, the liquidity that computer trading creates is fleeting, and it can fail when markets get unruly. Wildly fluctuating prices mean bigger risks for traders who earn a living by 'market making' — standing ready to buy or sell stocks at any moment and earning a profit from the spread.
The algorithms they use to trade profitably make more errors and are programmed to get out of the market altogether when markets get too volatile. The problem is exacerbated by the similarity of the algorithms used by many high-frequency trading firms — they all bail out at the same time. That is what happened in the flash crash. Of course, this problem happens with human traders too, who flee markets when they get too scary.
Another good thing about high-frequency trading is that it helps to synchronize prices across markets 5. It takes time to digest information, draw out implications and align prices. If prices in sugar or high-fructose corn syrup rose, stocks in Coca Cola would fall quickly; those of less well-known soft-drink companies would take longer.
High-frequency trade speeds up that process. In , it took minutes on average for a price change in one security to flow to others. Now it takes less than ten seconds. Not everyone likes this: fast synchronization wipes out profit opportunities for firms that make money by knowing about the momentary price imbalances. Some high-frequency firms exploit an anachronism in the structure of markets.
By US law, each regulated exchange must feed its best available prices for a stock, sale and purchase, to a central facility, which uses that information to establish a public National Best Bid and Offer NBBO. But exchanges also sell faster proprietary data feeds that firms can use to predict the NBBO in advance, gaining an edge over anyone using the public information alone. Hence, high-frequency firms can move in ahead of slower traders.
This tends to further synchronize prices. Big investors such as mutual funds and pension funds, which act on real-world insight and information with a long-term view, are among those which lose out, although they also benefit from the lower spreads created by high-frequency traders. In the United States, some large trading firms have set up private trading spaces to eliminate the timing edge for high-frequency traders.
It has introduced a trading 'speed bump' — an automatic delay of microseconds — which makes it impossible for traders to benefit from the faster feeds. Firms in other countries may follow suit. With computer codes carrying out trades with real-world consequences at a rate beyond that at which humans can intervene, the impacts of coding errors and digital glitches can spiral quickly.
Sudden spikes or 'fractures' in the prices of stocks are increasingly common. The flash crash of happened at around 2. New York time, and markets recovered in about 15 minutes. Had it struck just before closing time in New York, the shock would have affected markets worldwide and recovery would have taken longer. Some investors speculate about a 'splash crash', in which a massive spike in one market disrupts or freezes trade in foreign exchange, futures, commodities, bonds and other assets, potentially triggering a global economic crisis.
Some researchers 6 suggest that the spikes reflect a fundamental transformation of market dynamics, linked to the necessity for firms to use simple algorithms to maximize running speed. The nature of financial markets today is vastly different from that in the past. Rather than reflecting the collective decisions of people, they belie the behaviour of complex webs of technologies and their interactions with humans.
The potential for global problems is increasing as high-frequency trading has moved into international markets for futures and other assets 7. No industry — including energy and food, insurance and banking — is immune from disruption. In future, when airborne laser networks span the oceans, things may get even stranger. The location at which traders get the earliest possible information from two exchanges lies at their mid-point — between Chicago and London, this is in the middle of the Atlantic Ocean.
At such a site, traders could exploit a technique called 'relativistic arbitrage' 8 to profit from momentary imbalances in prices in Chicago and London. To explain: special relativity says that nothing can travel faster than the speed of light, c. Between major trading centres around the globe, such delays can be from a few to tens of milliseconds. Anywhere else, the distance to at least one of the exchanges would be greater and information would take longer to get there. In other words, within a few years it may become profitable to station a ship or other trading platform near halfway points between pairs of financial centres worldwide see 'Fast-trading hotspots'.
That said, the profits earned by high-frequency firms have fallen in recent years, suggesting that most of the easy opportunities for money-making have already been taken. If in ten years the wheels of the global financial system really will be greased by firms signalling from New York to Melbourne at Einstein's speed limit, research and policy-making should focus on two questions. First, how to avoid the biggest things that can go wrong; and second, how to make markets work as well as they can to serve society.
Publisher : Apress Berkeley, CA. Copyright Information : Adam Kritzer Softcover ISBN : Edition Number : 1. Topics : Business and Management. Skip to main content. Search SpringerLink Search. Authors: Adam Kritzer. Buying options eBook EUR Softcover Book EUR Learn about institutional subscriptions.
Table of contents 11 chapters Search within book Search. Front Matter Pages N1-xviii. Historical Background Adam Kritzer Pages What Are Your Options? Adam Kritzer Pages What Makes Currencies Move? Forex Analysis Adam Kritzer Pages Fundamental Analysis Adam Kritzer Pages Technical Analysis Adam Kritzer Pages Trading Strategy Adam Kritzer Pages Opening an Account Adam Kritzer Pages Account Management Adam Kritzer Pages
If you have enough knowledge, understand the market and can implement strategies, you can master the FX trading and become really successful in it. There is also an opinion that Forex trading is no longer a way to get rich. Of course, we all know about the most successful Forex traders in the world, who accumulated their wealth with trading, like George Soros or Steve Cohen, but for those who are new to the Forex world their success seems so far and unreachable.
Another widespread myth about Forex is that you need to have a lot of money to become successful with it. There is a part of the truth to this statement; if you trade with a lot of money and have a successful trade — logically you will make more profit that wat. However, you do not have to start with a lot of money to become successful. As trading is becoming ever more popular today, many people are turning to Forex trading.
Today, many of these stories are coming not from the well-developed countries, as you may have imagined, but developing nations like South Africa. If you wish to become a great Forex trader, but think that it is impossible for you to achieve the success, we suggest you take a look at the most successful South African Forex traders and see how they achieve it.
Open a demo account with XM. South Africa is one of the good examples when we talk about the increase in the popularity of Forex trading. The country itself is multinational and vibrant with the multilingual community and represents one of the best places for traders to have a successful trading career.
At the same time, the country is one of the most important economic hubs on the continent of Africa, so it is unsurprising that the number of forex traders in SA is growing rapidly, which results in the increase of the brokers that are operating in the South African Forex market.
Due to the high demand in the Forex trading industry, the government with its regulatory body — Financial Services Board FSB — is also trying to create a better environment and provide much-needed regulations, so that the money of the investors are protected and the market is developing steadily and fairly. Many of South African people find Forex trading very appealing due of the obvious reasons, you can have it as an additional source of the income which depends entirely on you, or perhaps if you are good in trading you can make it the primary source of revenue, and as we can see from the top successful FX traders in SA, you can get rich as well.
At the same time, Forex trading does not require much from the trader, all you need to have is a computer, internet connection, devotion, and an ambition to reach success. We can surely say that while Forex trading is not a successful path for everyone, anyone can reach success in it. When we say anyone — we really do mean it and the stories of the South African traders that have seen great accomplishments in trading will assure you of it.
Now let us take a look at the list of successful forex traders in South africa. Sandile Shezi is a Forex trader with a very controversial success story. The story is not unique but it is definitely worth mentioning. We have seen some people talking about their successes in Forex or any other industry, saying that they have put all their money in it — all of their income, retirement money or the money that was supposed to fund their studies.
This is exactly what has happened to the Sandile Shezi, as he put the tuition money in the Foreign exchange market. Sandile Shezi, who is now one of the richest Forex traders in South Africa, as well as among the best traders in South Africa, was living in a ghetto and was attending the local school. One day, he was given the tuition money for the whole year and it was then when he took a massive risk and put all of his money in the Forex trading.
After the investment, he was able to make a good profit that eventually put him in the list of the best forex traders in South Africa. Currently, years-old Sandile owns Global Forex Institute where he teaches young entrepreneurs about Forex trading, how to understand the tools and markets, how to create powerful trading strategies and how to become successful traders.
While the story has ended well for the young trader, risking the money that is supposed to cover your living costs or other important things, such as education, is never a good idea. The best is to invest the money that you can afford to lose. Also, you should keep in mind that Sandile Shez did not do it alone, as he was mentored by one of the best South African Forex trader George Van Der Riet who is the next trader we are going to talk about.
The success story of George Van Der Riet is an absolute opposite of the one we talked about above. He did not just get adventurous and put all he had into the Forex exchange market, but instead steadily learned about it before making his first investments. George was born and raised in Cape Town, later when it was time to further his studies he moved to Manchester where he was studying Finances.
During those years that he spent in the United Kingdom, he was working in financial institutes such as banks and the Forex industry. This experience helped George Riet a lot to become professional in the forex industry. Once he decided that he knew enough and was ready to start investments by himself, he started his own journey to become one of the most successful forex traders in South Africa. Since at that time George had already created a good reputation for himself, he was offered various job positions by the different companies, once he went back to South Africa.
However, his mind was made up and he was only thinking about his personal venture. It was at that time when George met with Sandile Shezi in , the event was a great help for both of them. George Riet saw the potential in him and was mentoring him for several years. As a result, both traders are in the list of top 10 richest forex traders in South Africa. As they both are aiming to help young people in South Africa to get more knowledge about the financial markets. Ref Wayne is someone South Africa should be excited about.
It is not very common that someone as young as Ref Wayne masters Forex trading as well as he did. Ref Wayne has developed the trading skills that he could transfer into the business. He turned to the trading since, as a young person living in the countryside, he was suffering from a lack of career development opportunities. This became the main driving force for him to put a lot of effort into trading and eventually, he became a multimillionaire, joining the ranks of top 10 forex traders in South Africa, when he was only 22 years old and over his successful career he attained the status as the richest South African Forex trader.
Like the other traders in our list, Ref is also an entrepreneur that puts a lot of time and effort into providing proper financial education to the South African people. He has created the African Forex Institute and even has released some free Forex lessons for the mzansi community. Let us face the truth, Forex trading remains a male-dominated industry, and perhaps it will be hard for it to change anytime soon.
However, it does not mean that there are no successful females among SA forex traders. In fact, there are a lot of women that trade and are very successful at it. South Africa perhaps has one of the most daring female traders, many of whom managed to make it among the best traders in South Africa and their stories are worth reading.
Nelisiwe Masango, who is barely in her early 20s, is the director of the Forex trading company Bear Run Investments and has spearheaded three successful businesses already. When she was a schoolgirl Nelisiwe wanted to become a neurosurgeon, but soon she understood that her love for the finances and investments was the true calling.
Instead of becoming a doctor she started learning entrepreneurial management, but soon dropped out and started learning how to trade. Masango started trading and became very successful at it, soon becoming one of the top forex traders in South Africa , and after tasting the success she established two business enterprises. One of the best female traders in South Africa admits that besides her love for the finances and investments, one of the biggest factors for her to start trading at an early age was a movie.
Paballo Nkwe and Danielle Lester represent a very powerful female duo in the male-dominated Forex industry. These female forex traders in South Africa are game-changers for the Forex industry in the country. Both women are in their 20s, owning a company together — iSelect Wealth. They mentor individuals, start-ups, S outh Africa forex traders and companies on how to trade profitably in the investment markets.
They have created models and platforms by using technologies and financial intelligence, and these platforms and models can be used by anyone. In addition to that, the duo has an incubation program, where they visit women in South African Universities to teach them about the finances and help them develop financial intelligence.
They also teach Forex trading and ways to make future investments. Try out XM broker! His quick rise to fame opened many opportunities for worldwide travel, to be featured at various venues as a motivational speaker, and to serve as a poster boy regarding the youngest millionaires of the world who have achieved this by their own efforts of by receiving a wealthy inheritance.
However, many people may not realize that this rash decision of the young man to trade his college tuition on the forex market that resulted in him becoming a millionaire was backed by the fact that he had experienced many hardships and had been deprived of many things that many other people in the world enjoy daily and take for granted, even if they are not considered to be rich.
If one looks at the past few years before this episode, he was simply another kid attempting to find a way to survive to become established in a low-income neighborhood within the nation of South Africa. He did not even have what some would consider a modest upbringing, as he knew dire poverty most of his growing up years.
That is why this served as a highly motivational factor that propelled him forward to make the rapid move of trading his college tuition money on the forex market in the hope of a positive outcome to be able to pursue a life that would offer more. During his years as a high school student, it was evident that he possessed a deep desire to move beyond the grip of poverty when he engaged in the sales of muffins to obtain some money. But though he did this, his peers were not supportive, as they considered this menial and not very dignified.
He had a mind to finding ways to prosper, even if one step at a time. Therefore, it is no wonder that he was brave enough to use his college tuition money to make a positive outcome by achieving a better life for himself and his family via the money he had hoped to gain on the forex market, which he was truly successful in doing. Sandile Shezi established the company in partnership with his mentor, George van der Riet.
Riet was an experienced Forex trader with more than fifteen experience when the company was founded. The company claims that it offers effective and affordable Forex training, helping people to make a living. They offer training to all citizens and hope to reach a large number of citizens. They have already trained more than ten thousand people, making it one of the leading providers of Forex training in South Africa. According to the company website, most of the Forex training and mentoring of the new traders is free.
Unemployment is a major problem in South Africa, and Global Forex hopes to alleviate the problem by training people in Forex trading. It holds free seminars in various cities so that those interested in Forex trading can get more information. Global Forex makes its money from Forex, and the results of the Forex trading are shared on the website so that all visitors can view the trading results and learn to trade similarly.
Sandile Shezi claims that the Forex-related trading contributes to the community they live in, giving back to it for the support and encouragement. Students can link their bank account to their Forex funds and earn some money from Forex trading while continuing their college or school studies. His risk-taking ability and success have made Sandile Shezi a role model for many young people in South Africa.
If you are keen on getting to know more about the youngest millionaires in South Africa, then you may find Sandile Shezi quite interesting and stimulating. Apart from being a big name in forex trading in South Africa, he has also been immensely successful within a short time.
He has been able to establish the Global Forex Institution, and it is a company that has done quite well and is running successfully. The good thing about the Global Forex Institution is that it also caters to people who belong to the lower-income segment. Therefore, it gives these less-privileged groups to aspire for building a flourishing forex trading business.
However, the Global Forex Institute of GFI had been put under close watch in for some suspected fraud and irregularities. He started his forex trading business when he was just twelve. Today GFI offers free training to young people, and according to Sandile Shezi, this is a way to give back to society whatever he can. The above are a few of the many probable success stories as far as Forex trading is concerned. It might make you feel motivated and bring in the sense of belief that you can also replicate the above success stories.
However, their success does not mean that each person who gets into forex trading will be successful. Success depends on several conditions and factors. However, there is no denying that there are good opportunities to make money trading on foreign currencies. Many people with very humble beginnings have been able to scale new heights of success. All that is needed is strong determination and ambition to work as hard as it takes to achieve success.
Though you will certainly come across many articles and resources many of them paid , you must be careful when giving out your hard-earned money. You must find out whether what they offer in return byways of e-books and other such things offer any value for money. Most of these are mundane stuff, and they have nothing much to offer to you as an ambitious and success-oriented young mind.
There are enough resources on the internet that could help you learn the trade tricks all by yourself. It will take some time because every success story has a gestation period attached to it. Rome was not built in a day, and in the same way, success stories in forex trading also take time to bear fruit and yield results.
The first few years could be that of learning and gaining knowledge and information. You will learn to strew some seeds on the soil. Some might germinate and take root, while others may wither and fall by the wayside. Focus on your efforts rather than looking at the failed opportunities. You will, for sure, see success sooner than later.
Table of Contents. Author Recent Posts. Trader since Currently work for several prop trading companies. Latest posts by Fxigor see all. Jesse L. Trade gold and silver. Visit the broker's page and start trading high liquidity spot metals - the most traded instruments in the world.
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