dbFX gives five reasons why FX will continue to grow in popularity with retail investors in 2010
dbFX, the online margin foreign exchange (FX) trading platform of Deutsche Bank, saw customer numbers increase by almost 40 per cent in 2009, as retail traders continue to look to diversify their portfolios by investing in FX.
dbFX believes this growth in the retail FX market will continue in 2010 for five key reasons:
1. Significant advantages of FX as a trading asset class: For sophisticated investors who are looking to put a proportion of their investments into a diversified asset class, FX is ideal because of its 24-hour liquidity, tight spreads and convenient access to margin and non-correlation to bond and equity markets.
2. Ever improving technology: Investors increasingly want to make their own financial and investment decisions and with the development of sophisticated trading platforms such as dbFX, they now have access to the FX markets from their home or office. Advanced trading tools (such as trading from charts) and risk management tools (such as stop loss limits) assist investors to trade, manage risk and be better informed.
3. Transferable skills from other asset classes: The fundamental principles of trading FX are similar to those required for other asset classes. For example, active traders who are following technical and fundamental analysis of the global markets are well equipped to take a view on the direction of the FX markets. These traders are able to diversify their investment portfolios from traditional bond and equity assets to FX, thus spreading their risk more effectively.
4. The rise of automated trading: From accounting for less than 1 per cent of trades in January 2009, algorithmic trades accounted for a quarter of all dbFX’s trading volume by December 2009. dbFX believes that algorithmic trading - which can be used to supplement self-directed trading - will continue to attract new entrants to FX.
5. Growth of Managed Accounts: Managed Accounts are becoming popular with investors who want to gain exposure to FX without having to actually trade themselves. Some platforms offer an end-to-end solution for managers and investors to get full transparency of the trading activity of their account.
Commenting Betsy Waters, director, dbFX said: “2009 has been another strong year for retail FX with investors continuing to better understand the diversification and potential rewards FX can offer within an investment portfolio.
“While continued education of the risks and rewards of trading FX remains paramount to the growth of the asset class, we believe 2010 will see the increasing popularity of FX with individual investors.
“Not only does technology continue to improve and enhance the client experience, but the growth of trading tools such as algorithms – which investors can buy off the shelf – are attracting a whole new range of potential investors to the asset class. In addition, the growth of customised solutions such as Managed Accounts offers investors a means to access and leverage the benefits of FX, but without having to actually trade themselves.”
“Finally investors who trade other alternative assets such as commodities have realised that much of the discipline required to trade FX is similar to the fundamental approach they already successfully employ, and therefore is easily transferable to currency trading.”
Launched in May 2006, dbFX is available in multiple languages, has 34 currency pairs and is accessible in more than 82 countries around the world. It brings the benefits of Deutsche Bank’s award winning expertise in foreign exchange to clients, with Deutsche Bank ranked the No. 1 Foreign Exchange Bank in 2009 by Euromoney magazine for the fifth year running*.
* Euromoney Foreign Exchange poll 2009
The website can be accessed at www.dbfx.com
For further information, please contact:
Zaman Toleafoa / Caroline Parker
+44 207 269 7244 / 7295
+44 207 158 5246
About Deutsche Bank
Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 78,896 employees in 72 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.