High Frequency Trading accounts for over 40% of FX trading

Within the context of the FX trading the terms “high frequency trading” and “automated trading” are interchangeable. Automated trading represents trading activities driven by systems that (1) automatically determine when and where to trade based on input of internal and external data and (2) trigger order flow into execution venues via APIs. Automated trading firms continue to make their presence felt in the FX market―slightly more than 40% of trading volume in spot FX is currently represented by high frequency trading.

Unlike the equities market, however, it is unlikely that automated trading could account for more than 50% of overall volume. Indeed, the sheer diversity of FX market participants and their varied reasons for participating in the market would make it difficult for a single group of FX market participants to overwhelm the rest. It should also be noted that at least half of the 40% HFT presence in the spot FX market is represented by banks themselves.