The world’s financial system grows every year in its volume. New software, means of communication and information transfer are created. Progress in the industry has led to the need for fast data transfer to obtain the actual prices. To help with this problem, a specialized FIX protocol was created.
This FIX (Financial Information exchange) protocol allows to instantly, in real time, share data between exchange sites. This protocol ensures the timely receipt of financial information, namely: actual quotations, market bids, news events, etc.
The FIX Protocol was created as an idea of implementing streaming messaging between the brokerage and institutional customers. The first companies that not only introduced this technology but also started to use it, were Fidelity Investments and Salomon Brothers. Thanks to these companies, FIX protocol has gained such popularity and completely replaced the boring phone conversations. All messages, as well as information about the buy/sell of a financial asset came into a computer, by which it was possible to take a decision about opening the deal.
Today, these two companies were followed by all major marketplaces and brokerage companies in the world. FIX Protocol has become an international standard for information exchange. At the moment, FIX works in two phases, that is, in the mode of financial data delivery, as well as the mode of data description. And if in the first mode, the players receive market information (for example quotation values), then in the second mode this information is fully decrypted. Thus, both algorithmic software and professional traders can use this data in their analysis and trading.
In addition to large companies, simple market traders can get access to this protocol with FIX API. This allows them to trade directly at the liquidity providers, bypassing the servers of FIX API broker companies.
Key advantages of FIX API protocol:
- Help receive market quotations;
- Up-to-date information directly from the market;
- High speed of the trading order execution;
- No delays and slippage.
As this protocol allows to receive the price information faster, a lot of trading robots was created, which trade on the principle of FIX API. A robot can instantly respond to any market movement, which allows to perform more precise market quotes analysis, and make trade deals.
FIX API is also successfully used in “manual” trading, because it gives a trader the same advantages. This allows them to trade according to their own strategies, make more precise and timely deals.
Timely receipt of prices allows the use of FIX API arbitrage trade, the methodology ofFIX API latency, or FIX API 2-leg arbitrage, which is about looking for price differences. After all, the main point for successful trading, according to these strategies, is in receiving quotes at one broker a bit ahead in time, and comparing them with a second broker’s. The broker which provides the ability to trade via FIX API is an ideal solution for these arbitrage techniques. Same as with arbitration, scalping operations are carried out with the help of FIX API due to the lack of large spreads and slippages. Direct access to quotations expands the list of tools that you can use in scalping and which are not available for the effective implementation of this strategy in “manual” trading.
FIX API allows to improve and optimize trading on the Forex market, as the quotations received on this principle are more accurate. In turn, the indicators provide quality signals based on this information. Using this protocol has a direct influence on the financial result of trading, improving its upward dynamics.