Alog trading has become one of the most hotly debated topics in the trading world. Do these forex trading robots add or subtract value from the markets? Do they make markets unstable? There have been many question that have been raised over the last few years regarding these black-box trading systems. I have been trading for quite a few years and I have started to notice some odd occurrences in particularly in the forex market. When I was trading the Eur/Usd a few years back the moves were fluid and trend happened a lot more often. Now however it seems the market seems to grind in a narrow range and then an explosive moves happens in one direction and then back to grinding again. I am not yet 100 percent convinced that this market behavior is due to automated trading, but it seems that a lot of algorithms are designed to scalp and if you many institutions and hedge funds that are running these robots trying to capture tiny market inefficiencies, this is the type of market activity that you would get. It is true that have spreads on many FX pairs have decreased over the last few years, and maybe we have the trading robots to thank for that one, but I guess nothing is free in life.
