Forex Brokers with FIX API Trading
Richard Montana | November 21, 2022
FIX (Financial Information Exchange) API (application programming interface) is an electronic communications protocol for financial information exchange. In the case of FIX API forex brokers, they can use it to allow communication between a client, trader, investment fund, or broker and a liquidity provider. FIX API is a universal standard. It’s used by numerous banks, prime brokers, and hedge funds.
What is a FIX API?
FIX API is a messaging protocol that is widely used in the online trading industry for trading forex, stocks, commodities, options, futures, cryptos and other financial instruments. FIX API trading is used by everyone from top tier banks, forex brokers, institutional traders, hedge funds and even by retail traders who are looking to gain that extra edge on their trading strategies.
When it comes to the financial markets and trading online, a trader can use an API to establish a connection between a set of automated trading algorithms and the trader’s preferred trading platform for the purpose of obtaining real-time quotes and pricing data or to place electronic trades.
What is a forex API?
FIX API (Application Programming Interface) is the perfect solution for traders looking to take advantage of deep liquidity pools, while having ultra-low latency and high-speed connectivity. This application allows traders to send orders for execution directly to a brokers pricing engine. In effect, the FIX API serves as a gateway to the forex marketplace.
How to use a FIX API for trading forex?
The easiest way to utilise a FIX API for trading forex is to simply plug the API into your trading platform to receive price data, submit trades, send and modify orders, and receive confirmations.
However, when you trade through FIX API, there is no trading platform to work with. Instead, you to use the technology to build your own platform, interface, or algorithm to send instructions to and listen to information from the FIX API. The application you create can be as simple or as complex as you desire to make it.
Several FIX engines exist today that can help to greatly reduce the time that developers need to spend creating transfer logic, leaving them to put more emphasis on the trading application and trading logic.
Pre-trade information is used in crafting trading strategies and decisions for implementation on the market. This type of data includes levels of liquidity, order flow and depth-of-market statistics streaming directly from exchange or market servers. When trading financial derivatives such as forex pairs, pre-trade information can be invaluable.
Trade-related information is focussed on the act of conducting trade. Order entry, confirmation and execution functions involve the transfer of data through FIX. Accordingly, trade-related information governs applied leverage, position management and the implementation of different buy or sell side order types.
Post-trade data aids in the recording, processing and transfer of asset ownership involved with market-based transactions. This variety of data is vital to accurate record keeping, regardless of asset class. It’s also a key aspect of calculating current P&L, tax liabilities and trading account drawdowns.
Why trade forex with FIX API?
In the context of retail investing, brokers offering FIX API technology provide a superior service that offers a direct connection between traders and tier-1 liquidity providers, meaning that trades are executed with no latency and with ultimate precision.
You can use a forex FIX API to build secure, automated trading systems in the FIX protocol. Your forex system can be set up to access streaming and historical price quotes, and place market or limit orders over secure communication channels.
Any orders you generate will be automatically routed to the brokers liquidity pool and executed at any time the markets are open. Therefore, a forex FIX API can give you an around the clock automated forex solution for ultra-low latency trading.
FIX API Vs. REST API
The REST API includes standard endpoints that are used by a wide variety of web services. FIX is a point-to-point protocol (between two parties) as opposed to a broadcast protocol (one to many). The FIX API uses FIX (Financial Information eXchange), a standard protocol which can be used to enter orders, submit cancel requests, and receive fills.
The FIX engine also allows you to send and receive application messages to perform actions such as submitting an order or receiving a trade notification (the exact range of what can be sent or received is detailed in the API’s FIX documentation).
Which forex broker has the best trading API?
Most forex brokers that offer automated trading provide some form of API connectivity. You should look for a variety of forex trading API features, such as forex robots and automated trading systems, integrated trading data and pricing histories, and the ability to connect to custom trading platforms. They should support a wide range of popular programming languages, such as Python, Java, C#, Visual Basic, and C++.
Keep in mind that some forex brokers reserve their APIs for institutional clients, and some may require that you meet a certain minimum deposit threshold or trading volume requirement in order to be eligible for FIX API access. You can see a selection of our best forex brokers with FIX API trading in the table below.
ASIC, BaFin, CFTC, DFSA, FCA, FINMA, FMA, FSA, FSCA, JFSA, MAFF, MAS, METI, NFA
FIX API trading advantages
- Quick transfer of important data
- Standardised language and widespread acceptance
- Develop proprietary algorithmic trading or black-box strategies
- FIX API preserves the anonymity and privacy of proprietary systems
- Access to institutional liquidity providers
FIX API trading disadvantages
- Re-coding systems and strategies to FIX API
- Perhaps too complex for beginners
- Not supported by all forex brokers
- Requires proper hosting
Conclusion: do I need to use a FIX API forex broker?
FIX API connection allows professional or sophisticated traders to send orders for execution directly to our pricing engine while offering ultra-low latency and high-speed connectivity. If you are an average retail trader with basic forex strategies then you might need necessarily need a forex broker with FIX API. However, if you are running demanding automated strategies or scalping systems that rely on the best possible market prices at all time, then a trading forex with a FIX API can certainly help.
Keep in mind, you will at least need some basic programming skills to be able to implement FIX API trading into your forex strategies. There is usually a small cost on the broker’s side for using the FIX API technology which means that some brokers might impose minimum deposit criteria or minimum monthly trading volume criteria. You could even combine it with a forex VPS for the best possible trading conditions.
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