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What Is FIX API In Forex?

What Is FIX API Forex

API stands for Application Programming Interface. It allows your app to communicate easily with different data sources. It can connect any business management system across all significant industries, including the financial markets. Popular APIs, like Exchange Rates API, use reliable data sources to provide accurate rates. Hence, you can efficiently do business with international participants. The FIX API Forex fosters a seamless flow of real-time data between market participants. It is widely used by liquidity providers, traders, and regulators. It allows you to address the market on an ongoing basis. But what is FIX API in Forex? This post will provide all the details.

FIX API Forex – What Is FIX API?

FIX API stands for Financial Information Exchange (FIX) API. It is a messaging protocol. It comes with a set of rules and methods to facilitate the electronic transfer of financial data.

Many people think that FIX API is exclusive to Forex trading. But in reality, it’s not the case. In fact, FIX API is widely used by stock, metals, futures, and options exchanges. Also, it’s used by Tier-1 banks, retail Forex brokers, and retail traders.

Fix API Forex - Why Use a FIX API?

FIX API Forex – Why Use A FIX API?

FIX API is suitable for experienced traders. It supports different programming languages. Therefore, you get the flexibility of using your preferred language.

The FIX API solution provides you with a high-speed connection directly to the trading servers. You will typically see a low latency of 1 millisecond. Also, you don’t have to go through third party programs such as MetaTrader 4.

Fix API Forex - What type of data do FIX API facilitate?

FIX API Forex – What Type Of Data Do FIX API Facilitate?

FIX API facilitates the transfer of three distinct types of data. Let’s take a look at them.

Pre-Trade

This type of data includes important information streaming directly from exchange or market servers. It includes levels of liquidity, order flow, and depth-of-market statistics. It is used in crafting trading strategies and decisions.

Trade

Trade-related data refers to the information conducting trade. There are a variety of functions that involve data transfer through FIX. It includes order entry, confirmation, and execution.

Post-Trade

Post-trade data is very important for accurately storing records. It helps in processing and transferring asset ownership involving market-based transactions.

FIX API Forex – What Is The FIX Protocol?

FIX is an acronym for the Financial Information eXchange. It is an open messaging standard. It is not controlled by any single individual or entity. FIX protocol enables you to perform real-time communication between client, trader, broker, and liquidity provider.

FIX API Access For Retail Traders

FIX API Access For Retail Traders

Technically, the technology is free. However, this does not necessarily imply that you will have access to trade using FIX API from every Forex broker.

Because there is an administration cost, the broker has to deal with it. It leads to several requirements. For instance, brokers impose minimum deposit criteria. Also, they may impose minimum monthly trading volume criteria.

Read: SOAP vs REST

The history of FIX API

FIX API Forex – The History Of FIX API

In 1992, the idea for the FIX protocol was developed. At that time, brokers were using phone trading for daily operations, like receiving and placing orders. However, the process was prone to error. Also, being manual, it was highly inefficient. The companies seamlessly transitioned from old-school analog trading practices to cutting-edge online trading thanks to the FIX API.

Initially, a few New York-based equities trading firms adopted the technology. The most notable companies were Fidelity Investments and Salomon Brothers. The latter was ultimately acquired by Citigroup.

The early version of FIX provided support for pre-trade and trade operations for equities markets.  However, technology has seen a major advancement throughout the years. Right now, the protocol supports the entire lifecycle of a financial transaction.

There are many versions of the FIX messaging protocol. The latest one is 5.0. However, 4.4 is the most widely applied version. It is massively popular among the Forex community.

Fix API Forex - Who owns FIX API?

FIX API Forex – Who Owns FIX API?

FIX Protocol Ltd, a UK-based non-profit entity, owns FIX API. The technology is free and non-proprietary. It’s an open protocol. Hence, there is no obligation for membership. You can start using the API for free. However, companies can consider paying to enroll in the FIX trading community.

The FIX community is amazing. The members are very supportive. Also, the protocol has remained free since the beginning. Its owner has no plan to force users into mandatory subscription plans.

Read: What Is an API Key?

Who Owns FIX API

FIX API Forex – What Markets Does FIX API Cover?

The Fix API covers the markets of foreign exchange and global equities. Also, it supports futures, options, funds, and bonds. Besides, it covers numerous security types.

The Fix API is widely used by stock exchanges, market-makers, broker-dealers, exchanges, and trading platforms.

What Markets Does FIX API Cover

FIX API Forex – What Is The Role Of FIX API In The Forex Community?

FIX API allows you to conveniently receive and distribute liquidity. Hence, numerous Forex market participants, including banks, market-makers, and prime brokers, rely on it. Also, asset managers, hedge funds, and corporations use FIX for receiving prices and submitting orders. It is massively popular among both sell-side and buy-side firms. Besides, trading platforms and price aggregators comply with the FIX protocol.

FIX API Forex – How Does FIX API Work?

FIX API has been designed to work as a messaging protocol, rather than an API. It enables two compatible parties to engage in buying or selling securities. It facilitates the transfer of messages between them.

You can get access to the Forex market by using a platform offered by their broker, like MetaTrader 4, Currenex, and cTrader. However, trading through FIX API is a bit different. There is no platform to interact with. Therefore, you have to follow a different approach to establish a connection with the recipient of the messages.

Read: What is an API?

FIX API is a server-to-server messaging protocol. It is bi-directional. Therefore, you need a predefined port to the host server to establish a connection using TCP. There is always a login message to start a FIX session. When it’s terminated, you will see a logoff message. You can use a variety of open-source libraries for building apps to connect with FIX API. It is compatible with C++, C# and Java programming languages.

Tags form the structure of a FIX message. The system should follow a certain piece of information based on each tag.

Here is an example of a logon message in FIX API version 4.4:

FIX API Forex – What Are The Benefits Of Trading With The FIX API?

FIX API provides you access to more information. Also, it leads you to faster execution. Hence, you can gain an edge in the market. Here are some of the key benefits for which traders choose to trade directly with the FIX API:

  • Low latency – FIX messages are lean. They are very easy to generate, transmit and interpret. It significantly reduces round-trip latency.
  • Lightweight – The size of messages is very small. Hence, you need to use minimal bandwidth to transmit them over the internet.
  • High frequency – FIX API supports a high level of frequency. Hence, you can send messages hundreds of times per second.
  • Anonymity – You can operate FIX API on your own server, provided that you have a proprietary trading system.
  • Standardized – FIX API is widely accepted in the Forex trading community. Hence, you can concurrently connect with multiple brokers. Also, it lets you easily migrate as the need arises.

FIX API Forex – What Are The Limitations Of FIX API?

FIX does not allow you to query any specifics related to the actual trading account. Hence, you can’t query important data, like Equity, Balance, and Available Margin. Also, FIX does not support historical market data. You can use it for collecting only real-time data.

FIX API Forex – How Can I Get Access To Free FIX API Data?

You can get free FIX API data access by using Exchange Rates API. It is very easy to use. You just need to write a few lines of code. You may acquire free Forex data for hundreds of different currencies using it.

Here is an example of using Exchange Rates API in Python:

As you can see, the process is very simple. It involves writing just a few lines of code. It offers the quickest and easiest way to access FIX API trading.

Should I Use Exchange Rates API In 2022?

Exchange Rates API offers a simple, quick, and reliable solution. It enables you to easily get real-time currency exchange rate data. It supports over two hundred currencies. The API updates the rate every 60 seconds. Also, it uses reliable data sources. Hence, you will always get accurate rates. Also, it is very easy to use. Therefore, you should seriously consider using Exchange Rates API in 2022 and beyond.

Exchange Rates API is an easy-to-use REST API. It delivers highly accurate currency exchange rate data for your business. Try it now for free.

FAQ

What is Fix API in Forex?

Fix API is a messaging protocol. It is widely used in the electronic trading industry.

What is an application programming interface?

The application programming interface is a software intermediary. It allows two applications to communicate with each other. It provides programmatic access to service functionality and data.

What is financial information exchange?

The Financial Information eXchange (FIX) is an electronic communications protocol. It is used to disseminate price and trade information among investment banks and brokers.

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