Mark Thomas Hill#61

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What is high-frequency trading (HFT) in forex?

High-frequency trading (HFT) is a form of algorithmic trading that executes thousands of trades per second to exploit tiny price inefficiencies. HFT firms use co-location, FIX APIs, and advanced hardware to minimize latency. In forex, HFT adds liquidity but can create volatility spikes and flash crashes. It is inaccessible to most retail traders due to technology costs. Regulators often scrutinize HFT for fairness. Understanding its impact helps traders interpret sudden order book shifts and liquidity imbalances. While controversial, HFT is a major driver of modern forex market microstructure.