The Importance of Big Data for Forex Broker

January 10, 2020

Every field in life needs predictability. This is especially true in case of the forex trading. Nobody wants to invest in a field where they have no idea about the return on investment. We are also aware that investing in the forex market comes with a huge risk. The more risk you take the better chance you have of getting higher profit. This also means that you can lose a big trade that can throw you out of the market. The best strategy should be to increase the chance of winning trade without taking more risk. This can only be done by using the big data of market history. For Forex brokers, large data can do wonders. There are certain parameters related to large data that can increase the profitability of the brokers.

 

Better advertisement

Big data can help brokers advertise their services in a better way. Without large data, there will be not enough convincing proof for the forex traders to join the broker’s platform. When the brokers advertise their service to the traders, they can present large data of profitable trades and time in history where a large number of traders have made huge profits with this broker. Advertisement is the key to profitable forex broker services. If you advertise correctly, you have a better chance of attracting more traders to join your platform.

 

Trader retention

Forex brokers need the traders to trade the forex market continuously so the brokers can run the service successfully. When the traders lose a trade, they stop trading because they lose hope. This way brokers can lose the traders and lower the retention of traders. Big data can prevent this from happening. Even when the trader loses a trade, they will not lose their interest in forex trading because they can see how the market performed during previous years. They can focus on the fundamental and technical analysis results for previous data. This can increase the retention of the forex traders so this will improve the profitability of the forex brokers.

 

Spread estimation

Top Forex brokers take a fee of few pips which is decided by the movement of the market. Most of the brokers charge two pips spread but this spread can increase in case of high market volatility. Brokers can make a better spread estimation when they have big data for that currency pair. Early detection of market volatility is only possible because of certain fundamental indicators showed an increase or decrease in market volatility in history. The more data you have for the effects of these fundamental indicators, the more you can estimate the spread properly.

 

Risk assessment

The good forex broker should be able to provide better market assessment facilities to the forex traders. Forex traders like to trade with the brokers which provide good market insights by relating the present data with the previously available data, of the currency pair. Brokers can take advantage of the big data and provide better answers for the forex traders. This will increase the retention of forex traders. Continuous risk assessment is only possible because of the availability of big data.

 

Crisis prevention

Many brokers who rely on big data have a better chance of saving their traders from taking extremely dangerous trades. Sometimes there is a crisis in the market and any trader who enters the market at that time has a risk of losing all his investment. By using Big Data Analytics, Forex broker can estimate the crisis in advance so they can inform the traders about the risk. Most of the brokers will give high volatility warnings in advance to protect their traders from losing all investment.

 

Forex broker performance

The forex market data is not limited to currency pairs only. When we are talking about the perspective of brokers, we also need to consider the big data for the broker’s performance. Brokers can check the performance of the other broker services and estimate the amount of profit they can get by providing this service. The market is not always the same but predicting the market will become easy when the brokers have large data. The forex brokers can decide which currency pair should be allowed to trade on their platform and which type of traders are best for their services.