Risk Management Module
A collection of risk management essentials made available for in-platform and API traders.
Managing risk is an integral part of a profitable trading strategy. Traders need to be alert to available margins and the profit/loss on their positions, which allows them to make appropriate trading decisions or hedge risks. Since this information could change up to one hundred times per second, to remain actionable, it needs to be available in real-time.
The goal was to give traders the right toolkit for building risk management strategies. A toolkit that needed to be available to both in-platform and API traders. This would be a ground-breaking feature for FXCM since none of their competitors had a trading platform that offered it.
Transmitting an abundance of data via a standard FIX or a proprietary binary protocol is costly from the network and server usage perspective. Data that includes ever changing available margins and total profit/loss. That cost is the main reason why none of FXCM’s competitors had the proper risk management tools.
FintechOps solved this by limiting the frequency of updates sent to the client via the server. Instead, data was calculated on the client’s side, relying on regular, frequent price updates. Additionally, the algorithm—calculation—had to be optimized so that even a mid-range trader’s workstation could handle PAMM or LAMM accounts when a financial instrument changes price 15-20 times per second.
API users received the same set of available features for robo-trading via ForexConnect SDK.
As a result, both in-platform and API traders received the proper tool for hedging risks, and that also alerted them to an imminent margin call threshold, whether a warning, partial liquidation, or total liquidation of all positions.
- The new version of the trading platform and its integrated risk management toolkit helped FXCM attract new customers from other brokerages, while retaining their existing customers.
- The majority of large API robo-traders noted they increased their earnings by 20% due to the new feature offered by the SDK.