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e-Forex Montage

April 2006
Issue 22
Real-Money Managers talk Digital FX
Heather McLean
Freelance writer.
Peter Panholzer
"an e-platform is the difference between having a car and having to travel by foot"
Real money managers are using electronic trading to get ahead in the foreign exchange market. Today's traders are working with cash in one of the most complex markets around. To do well, real money managers have to have their fingers on the pulse of the market and they need to do their work quickly. And eFX technology is helping them succeed.

“An e-platform is an incredible event that’s happened over the last 20 years,” Peter Panholzer, chief executive officer at Dynex Corporation, states. “It’s the difference between having a car and having to travel by foot. I do not believe I could trade the volume I do, without an eFX platform.”

Trading electronically has greatly reduced the chance of human errors, Panholzer states, which in turn improves customer service all round. He comments: “Online trading is automatically linked to STP. That’s an immediate relief for the back office, with a 70% reduction in time. Added to that is the independence from the floor broker, who in the past executed trades in the best way he could. Now, we have nowhere near the amount of complaints we used to get, in execution for instance, as human error has been greatly reduced throughout the company.”

FX technology facilitating Research
Real money managers need to have done their homework well before they execute; there is no room to cut corners in this market. FX technology and e-commerce is aiding research activities at Dynex, says Panholzer: “eFX technology allows systematic trading to be executed more accurately and also generates a data stream that is an important research material for us. We store it for future reference.”

On how technology is impacting the FX market as a whole, Panholzer sums up: “Technology can only improve the market. It has been said that technology will make robots trade against robots, and I don’t see a problem with that because behind every robot is a human programmer; the robot that wins has the superior programme. Whilst in chess, a chess master can beat a robot, in this game the robots beat the traders. So the robots will become increasingly important for FX real money managers.”