TradeTech FX: “Automation needs to expand its focus away from the point of trade execution”

Panel found regulation and codes of conduct restricted what traders could do during this window and that automation could be put to better use further up in workflows.

Shifting the focus of automation upwards in workflows away from the point of trade execution could uncover improvement in multiples, a buy-side panellist has concluded.

Speaking at TradeTech FX, eFX lead for British-American hedge fund, BlueCrest Capital Management, Garrod Treverton, said automation was too focused on the point of trade execution which lasts anything from a few seconds to a few minutes and where restrictions make innovation more difficult.

“Regulation and codes of conduct are very restrictive in what traders can do during that time. It’s basically trade sequentially when you receive a trade unless you can’t,” said Treverton.

Instead, he argued that if the power of automation were to be focused upwards, examining where a trade came from, how it could’ve been managed differently before it arrived and how the order might relate to other books of business then the industry could uncover “improvement of multiples”.

The relationship between traders and portfolio managers was another area where Treverton and fellow panellist, Vinay Trivedi, chief operating officer at MaxxTrader Systems, agreed automation could be used to improve processes.

“Traders are at the coal face all of the time. They understand liquidity, pricing and dynamics. For portfolio managers foreign exchange is not their primary concern. They know it has an impact but there needs to be more dialogue like you see in fixed income for example,” said Treverton.

“This is where technology can help bridge the gap,” added Trivedi.

Changing skills

A common theme on panels at TradeTech FX 2022 was the changing skillset needed on the trading desk in light of greater levels of automation and electronification.

“Python has become a feature of desks. Coders and traders sit next to each other and that’s great as the guys building the new processes can see first-hand the workflows and trader actions,” said Treverton.

“Getting the trader off the desk is the wrong notion. You can’t rule out the experience of a trader particularly in an emerging market currency. The industry should continuously work on bringing innovation by the hybrid model is here to stay,” added Trivedi.


When asked what was slowing the pace of automation, Trivedi said certain firms has taken too long to let go of legacy systems and this had created a “bottleneck” while he said some solution providers had stopped innovating after a certain stage, for example after developing and EMS or OMS.