Long established copy trading platforms provider Tradency is now ready to deploy a whole new type of retail investing solution. Finance Magnates recently met with the founder and CEO of Tradency, Lior Nabat, at the firm’s offices where we got to learn from him about the development process and motivation for the new offering called RoboX.
Nabat explains that currently brokers face two main issues with copy trading that can be greatly improved with the new service. First, despite the high degree of trading automation, clients still need to learn how to use the platform to find the best strategies for them, to apply them to the time frames of currency pairs or CFDs they want and to calculate the level of risk they can afford to stand. All this takes time and resources from the brokers to teach and for the clients to learn – time that could be used for trading.
Second, copy trading creates a problem whereby successful trading strategies cannot be sustained in the long term. Beyond the fact that different strategies fit different market conditions, Tradency’s analysis shows that over-consolidation on a few winning strategies causes liquidity problems that make them no longer attractive. Simply put, many strategies rely on exploiting small opportunities to gain from the fluctuations in the market but once they have too many followers they cannot get the same rates for all of them and thus slippage ruins the overall performance.
RoboX is a solution to the current problems with copy systems as it offers a simple yet powerful tool to manage investments based on trading algorithms without a need to learn a thing. Additionally, it prevents the human tendency of flocking to a single leader which causes too much volume to degrade the performance of a strategy relying on capturing a few pips at a time.
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From a user perspective, all you have to do is to log in to the website, answer a few straightforward questions about your targets and risk appetite/tolerance and the system will present you with a tailored basket of strategy packages and money allocation recommendations to review, modify and approve. The whole process takes about thirty seconds and you’re ready to go. For those looking for more control, positions can be closed manually at all times and a simple switch can turn the system to user approval mode so that signals will require conformation before executing.
Behind the scenes, RoboX works by selecting the best performing strategies that fit the criteria rules set by the user’s initial answers. The system uses big data mining techniques to go over the millions of combinations possible (of strategies, time frames and instruments) to automatically update the packages every day for best performance for each client.
Over the last decade Tradency had more than one million strategies and 650 million signals going through its systems as well as about one million end users in total. This gives the firm ample statistics about the way traders pick the best (or sub-optimal in many cases) strategies for themselves, which the new offering builds upon. The developers have been working on RoboX for the past year and a half and six of Tradency’s top brokerage clients (from Japan, Europe and the U.S) have already started testing the system.
For brokers the new system offers a way to approach a new type of client, those looking for exposure to the FX market but have no time or desire to learn it or constantly adjust the strategies they follow as conditions change. The number of such passive investors can be much higher than the active traders that brokers target today and if they will market it correctly we can see a brand new ecosystem opening up in the field.