ALGOS, which trace back their origins to equities in the 1970s, have become a dominant force in financial markets. They are characterized by the use of computer algorithms to automate trading decisions and have significantly reshaped how FX is traded, driven by advancements in computing power, the pursuit of efficiency and the need for a competitive edge.

In FX, the largest and most liquid financial market in the world with daily trading volumes exceeding $6trn, algo trading started gaining prominence in the mid-2000s. As FX is traded 24 hours a day, it’s well suited for automated algo strategies.

Today, the spot FX market is comprised of dozens of banks transacting across more than 15 venues for euro dollar, the most commonly traded currency pair. On top of that, each bank typically operates several different algos including ‘aggressive,’ ‘passive’ and ‘dynamic’ versions, offering an enormous menu of choices for clients.