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How Can The Forex Landscape Become Friendlier to Retail? 4 Ways to Boost FX Inclusivity

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The world of forex is an extremely lucrative place, it’s also proven time and again to be a challenging environment for retail traders. Can new technologies and a commitment to transparency help to break down the inclusivity barriers for currency trading?

It’s not unusual for global currency trading volumes to reach $7.5 trillion per day, and this significant flow of money unlocks a vast array of opportunities for traders who are knowledgeable and quick-witted enough to capitalize on fluctuations throughout FX markets before competitors can catch up. 

If this is the case, then why are so many investors incapable of creating profitable trading strategies? According to data compiled by Traders Log, an average of 72.2% of forex traders lose money. 

In an analysis of 32 ESMA-regulated brokers, the most efficient broker for trader profitability, CPT Markets, still saw as much as 60% of users lose money. The worst performer on the list was Trade Nation, in which 86% of traders lost out. 

These worrying statistics highlight the uneven playing field for retail traders that forex markets offer. So how can this gap be bridged? Let’s take a look at four ways that technology and emerging trends can unite to deliver FX inclusivity: 

Predictive Analytics Offer Equal Opportunities

One of the biggest discrepancies between retail FX traders and their institutional counterparts stems from a lack of resources and time management. How can investors be expected to keep up with the quality of tools and density of teams allocated to capitalizing on the opportunities thrown up by global trading pairs? 

The answer lies in artificial intelligence, and its ability to leverage advanced prediction models that utilize historical market data to identify patterns and trends. 

Not only is AI helping to create more advanced analytical models, but it can also forecast future market trends by tapping into big data and extensive networks of unstructured data to inform key trading decisions. 

One example of this is the ability of AI to tap into advance weather forecasts to identify global events that could impact domestic agriculture, energy, and domestic currency performance in a way that can identify advantageous trading pairs as actionable advice. 

Artificial intelligence can also look to previous price data to leverage insights into the likelihood of a trading pair rising or falling in the future. 

Embracing Funded Trading

Funded trading has been labeled as one of the biggest innovations entering the forex ecosystem this year, and offers affiliates access to capital in order to make trades without having to risk their own money, all in exchange for a share of the profits. 

This could be a transformative innovation for retail investors who have repeatedly shown their ability to identify an opportunity without having access to the cash flow, or the capability to take on riskier trades. 

Funded trading can be a major innovation for forex traders who are impeded by limited cash flow, and can offer low-risk rewards for outperforming the wider market. 

AI-Powered Risk Management

Artificial intelligence will play an essential role in helping retail investors gain the same quality resources that their institutional counterparts take for granted today. These innovations in AI will be particularly strong in the realm of risk management. 

Through identifying potential emerging risks and suggesting live adjustments to established strategies, and offering insights into how and why certain risk alerts are taking place, AI can make it far easier to actively manage risk and make more informed decisions to reduce exposure to risky scenarios. 

In addition to this, algorithms powered by AI can help to identify and stamp out fraudulent or suspicious activity throughout the forex market, helping to ensure that retail investors have the best possible chance of accessing higher yields and safeguarding their market performance. 

Enhancing Market Transparency

Every retail investor wants to safely conduct their FX trades with a trustworthy broker that can match their goals and risk appetite. But how can the most effective FX brokers be identified based on their respective qualities? 

When it comes to discovering the right broker, forex markets are especially convoluted. Options include regulated and non-regulated brokers who can offer different degrees of market access and analytical insights into trading performance. 

The complexity of discovering opportunities is only enhanced further by incorporating alternative investment strategies like CFDs into FX markets. This calls for a more in-depth network of CFD brokers reviews in order for traders to learn more about the firms that can suit their needs. This can help them to compare and contrast an aggregated CMTrading review, Avatrade review, and Exness review to better understand which broker suits their goals best. 

The opacity of forex brokers can be a hindrance for traders, but with the right access to insights and the individual offerings of brokers, it can be far easier to navigate these complex markets in confidence for retail. 

Leveling the Playing Field

While 72.2% of forex traders lose money, the emergence of artificial intelligence and predictive analytics can significantly help to level the playing field between retail traders and their resource-rich institutional counterparts. 

In a convoluted landscape at the best of times, this greater adaptability can help to provide a more equal footing for retail traders and can help them use their skills to identify and capitalize on market opportunities at a faster pace. 

The forex landscape is an extremely lucrative place, and with the right blend of skill and technology, all traders can finally gain an equal opportunity to build a sustainable FX strategy.

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