Everybody is moving to the Cloud and Foreign Exchange is no exception.
While the Cloud does contribute to greater access to markets and pools of liquidity, the broad use of the word Cloud can be confusing . Despite the benefits of storing and moving vast amounts of data on the Cloud, Forex traders are understandably wary when it comes to confidentiality, security and latency.
In the current issue of e-Forex Magazine, the London-based foreign exchange quarterly, Dan Barnes sums up both the benefits and concerns in an article titled,FX traders see sunshine through the Cloud,“In the highly distributed and fluid foreign exchange markets, a highly distributed technology model carries obvious advantages. Nevertheless, placing such important assets in the hands of a third party has not always been a comfortable choice for FX trading firms.”
Though worries within the FX community are fading, be aware that no public Cloud is secure. As an example, Amazon mines the data in its Cloud and, while there are providers such as Rackspace, Softlayer and IBM with huge market share, they do not fully meet the needs of the foreign exchange industry. Most well-known public Cloud brands very little or no choice regarding location of services or connectivity to any financial venues. They focus on selling proprietary services to clients and are not suitable for a broad range of FX requirements.
To counter these limitations, FCM360 has created aFinancialCloudspecificallyfor the FX trading community. The FCM360Financial Cloudis based on a collection of multiple data centers around the world with a broad spectrum of connectivity options and different types of computing. The FCM360 (http://www.fcm360.com) Cloud is private, no one else has access to it and we don’t comingle any data that would be problematic. In addition to its broader capability, the cost is lower than competing brands. Any FX broker or trader wishing to use thisFinancial Cloudcan select a defined set of components to provide the specific solutions required.
This includes low latency trading, which skeptics no longer consider incompatible with the Cloud. Today, operating systems, network and processing technologies and the basic Cloud fabrics respond faster than ever before. Using theFinancial Cloudfor low- latency trades does require a carefully constructed solution that takes into consideration how all of the pieces of the hosting fabric interact to ensure that every latency and networking roadblock has been mitigated.
Though latency can be defined in relative terms, it comes down to two major factors:network latencyandmachine infrastructure latency. If a trading house is looking to completely replace a larger, more expensive bare-metal infrastructure, it must ensure that the networking and processing latency is equal to or better than the existing deployment. The common network round trip “ping” test and order “time stamp” latency results must be impressive.
For those considering a transition to the Financial Cloud, consider these musts:
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Location–
There must be full disclosure of location and proximity to exchanges, liquidity venues and low latency market data and news feeds. The actual latency the cloud-trading infrastructure service is offering must be known in advance.
Multiple Connectivity Options–
There must be a wide array of connectivity options to exchanges, ECNs, banks and market data/news providers. The network must connect seamlessly to trading counterparties in a cost-effective way that also lowers the risk of not having the option to trade multiple venues.
Turnkey–
TheFinancial Cloud providermustoffer a turnkey solution with access to all of the common components that comprise a trading infrastructure and itmustemulate a traditional hosting model that visually removes all complex individual components that make it difficult to turn up services when needed.
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