A New Frontier: How AI is Shaping Forex Trading


In February 2019, US President Donald Trump signed the official order for the American AI Initiative. The initiative aims to ensure “American leadership in Artificial Intelligence”, as paramount to “maintaining the economic and national security of the United States”. Despite emerging only in the 1950s, artificial intelligence is already changing the ways countries expand their financial, business and defence systems. The price tag on this ‘technology of a generation’ is growing at an exponential rate: in 2018, AI had a projected value of $1.2 trillion, and in 2022 it is expected to be valued at $3.9 trillion.

As the AI sphere expands, so does the world of online forex trading. The first online forex trading platform was launched in 1996, and enabled the first generation of online retail traders to participate in the largest market in the world. Twenty years after the first online trading platform, and retail forex trading represents $282 billion of daily turnover.

In 2018, the two advancing technologies came together to create a new forex trading experience for users. It’s clear that the next frontier for forex trading will be the integration of AI – but how exactly will this impact trading in 2019? In this article, FXTM will take a look at the ways AI is being implemented to improve a trader’s experience.

Customised trading experience

In 2018, forex brokers started to put a lot of emphasis on mobile trading. Most brokers had their own purpose-built mobile apps developed, like the FXTM Trader App, which allows traders to open positions, deposit and withdraw, and track profit potential from their phones. However, the sheer number of mobile trading apps released last year meant it was difficult for traders to decide and distinguish between various apps’ capabilities.

AI has the potential to set brokers apart in the field of mobile trading. FXTM recognise AI’s ability to transform the world of mobile trading and have started to explore ways it could enhance their products and services. From personalised trade analysis to assisted education, AI is set to change the ways users interact with their mobile trading app.

New predictive analytics

Forex trading firms are also continuing to research AI’s ability to predict fluctuations in the forex market. Japanese enterprise Nikkei recently used AI to predict Dollar-Yen exchange rates. The software predicted the value of USDJPY in a month’s time, and this prediction was compared against the company’s top analysts. The AI predicted a value which was 0.05 away from the correct value, beating the company’s top analyst, whose prediction was off by 0.6 from the correct value. The AI used natural language processing and vast amounts of data from the company’s articles, trends, commodity prices and market indicators.

A similar study by I Know First found that an AI predicted the correct values 77.75 per cent of the time over a 7 day period. AI algorithms can inform short-term strategies with real-time data – something which is particularly valuable for traders who use scalping. However, it’s worthwhile to note that the forex industry is just at the beginning of its journey with artificial intelligence. This means that the ability of AI to inform trading is still very much underdeveloped.

Potential for lessened risk

Last but certainly not least when it comes to the forex industry, artificial intelligence has the possibility to reduce overall risk. Automated stop loss orders, which have become commonplace in the trading world, sell off assets once they fall below a certain price. With these in place, traders’ emotions are less likely to sway sell-off decisions.

The broader applications of AI in forex trading are likely to produce similar results. Traders’ decisions can be effected by many variables, including political news, fear, fake news and more. By using AI to help inform their trading decisions, traders can formulate an idea of what the markets might look like without added volatility from outside factors.

As it stands, even though it’s still in the development stage, AI looks set to revolutionise online trading experiences in 2019 and beyond. It has the potential to create tailored, client-centric user journeys, informing decisions with improved predictive analytics and potentially decrease the impact of emotions on trading decisions.


Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: There is a high level of risk involved with trading leveraged products such as forex and CFDs. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 90% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.


The FXTM brand provides international brokerage services and gives access to the global currency markets, offering trading in forex, precious metals, Share CFDs, and CFDs on Commodity Futures. Trading is available via the MT4 and MT5 platforms with spreads starting from just 1.3 on Standard trading accounts and from 0.1 on ECN trading accounts. Trading on the MT5 platform is not available for Forextime UK Limited. Bespoke trading support and services are provided based on each client’s needs and ambitions – from novices, to experienced traders and institutional investors. ForexTime Limited is regulated by the Cyprus Securities and Exchange Commission (CySEC), with licence number 185/12 and licensed by the Financial Services Conduct Authority (FSCA) of South Africa, with FSP number 46614. Forextime UK Limited is authorised and regulated by the Financial Conduct Authority, firm reference number 777911. FT Global Limited is regulated by the International Financial Services Commission (IFSC) with license numbers IFSC/60/345/TS and IFSC/60/345/APM.

This article was written by the trading professionals at FXTM, an regulated and reliable Forex brokers. For more in-depth market analysis, please visit FXTM at forextime.com.

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