Last week, we listed the most frustrating trends and developments we encountered in 2014, stirring some great insights from readers as well. As we enter 2015, however, we find it opportune to paint the upcoming year with some more optimistic brushstrokes, focusing on prospects for a better-regulated, more sophisticated forex industry and market.
Cloud-Based Strategizing/ Ron Finberg
I am excited about cloud-based automated trading strategy deployment. The ability to create, backtest and deploy trading strategies in a co-hosted, low latency environment provides an edge for retail traders who are often limited by their local technology and the expense involved in renting their own VPS.
Short-Term Traders Back in the Game/ Avi Mizrahi
There are growing indications that a major correction in the real estate, equity and commodity markets might be on their way in the coming year, especially toward the second half 2015.
As the Fed’s tapering off of quantitative easing is now perceived as a matter of fact by most global observers, skyrocketing prices could finally start going down worldwide.
When the world’s stock markets get to more reasonable levels, as has already happened with the price of oil, fundamental investors will get in and the more short-term focused traders (or outright speculators) will move to trading leveraged forex or retail binary options.
Naturally, such a long overdue correction will also cause volatility across the board, leading to many more trading opportunities for CFDs and currency pairs. The online leveraged trading industry is bound to have a very good year as a result, both in terms of volumes and new clients, according to my expectations.
FX Brokerage, Investor Prospects in New Zealand/ Jeff Patterson
I consider myself an optimist, and by optimist I mean I feel the foundations of the financial industry will NOT be convulsed by some global pandemonium or doomsday catastrophe in 2015. However, in 2015, I genuinely believe New Zealand-based brokers and investors face a rosy future in light of the developments of this year.
With the passage of New Zealand’s Financial Markets Authority (FMA) Phase 2 initiative, the playing field in the country shifted dramatically, effectively safeguarding brokers and investors. For the basic FX investor in New Zealand, this can be heralded as a victory given the cushion and protection afforded by the domestic regulator, much in the same way that the UK’s FCA provides an adequate check against fraudulent practice.
Conversely, brokers now can navigate through one of the most modern and comprehensive legal frameworks in the world, whilst abstaining from outright suffocation that, for brokerage prospects, has turned the US into scorched earth.
Additionally, the beginning of December saw a further boost towards this aim, with the exemption of the NZ$ 1 million requirement. More specifically, brokers who are domiciled in New Zealand but don’t provide financial services to clients in the country are not faced with the need to park the minimum capital requirement.
In closing, with a healthy proximity towards Asian investors and a functioning regulatory infrastructure, Kiwis for the first time can look forward to greener pastures in 2015.
“Bitcoinizing” State Currency/ Leon Pick
I’m looking forward to breakthroughs in harmonization between the digital currency and regulatory worlds. But not just plain progress of regulation, such as through the introduction of more BitLicenses and their refinements. The next step is for a government to take what we’ve learned from Bitcoin and adopt its technology for its own currency.
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Today, we’re seeing it the other way around, where people aspire for Bitcoin to graduate into a legally recognized currency. This is more complicated than it sounds.
P2P fiat obviously won’t happen any time soon, but we hope to see at least the start of a project looking into the technology (think MintChip) and what’s needed for this to happen. The existing Bitcoin community can be brought on board and some will be willing to help.
Smart, Non-Excessive Regulation/ Adil Siddiqui
Post-2008 regulation attempted to make the market a better place to trade. The new rules in the US for retail brokers is excessive and removes the competitive element.
The blessings of innovation are seen through the new transparent portals that remove the red tape associated with financial services, whether it’s FX transfers, lending or investment opportunities. Regulators need to be smart, the FCA is taking a positive step, and I’m hopeful that this trend continues and market forces dictate governance, not politicians.
Fundamental Questions/ Victor Golovtchenko
With the start of the new year, the main dilemma facing the currency markets will remain on the table – “When will the Federal Reserve hike interest rates?” With an overwhelmingly positive sentiment towards the US dollar and a surprisingly hawkish rhetoric from usually dovish Fed Chair Janet Yellen, in my view, the question still stands whether the Fed will hike interest rates at all.
Any disappointment on this front will bring substantial volatility to the forex market. The US Central Bank is not alone on that front – will the European Central Bank be able to start quantitative easing legally in the Euro Zone?
Looking eastward only makes more questions pop-up. On the one hand, we have the Bank of Japan printing money at the fastest rate it ever has and way more than any other major central bank in modern history.
Next door, neighbors in China are facing a dilemma of their own making – “How will the Chinese authorities arrest the housing market decline?” Antipodean currencies have been big movers in 2014, and they are likely to remain so in 2015 as the major drivers of global growth are starting to hiccup.
Last but not least, Russian President, Vladimir Putin’s headaches caused by the ailing national currency are unlikely to be over any time soon. While oil prices remain low, economic growth in Russia is quite unlikely to pick up materially. More than that, high interest rates will be squeezing consumers and businesses as long as the ruble rout continues.
New Era in Russia?/ Vadim Sviderski
The obvious thing to be optimistic about for 2015 in Russia is the Forex Law, which will take effect in October 2015.
The regulation of the vast and as-of-yet non-supervised forex market is an essential step for the local industry’s maturation and growth. As in 2014, we have seen traders complaining about questionable brokers swallowing up their funds. Starting this year, these instances will be far less probable, as only licensed brokers will be permitted to operate.
Furthermore, putting forex trading under a regulatory umbrella will help in enhancing its image of a sound financial investment instrument. Over the last couple of years we have worked closely with local players aiming to bring greater transparency and fairness to the industry, and we will continue to do so as the regulatory landscape changes.
Did we get it right? Share with us in the comments below your sources of optimism in 2015