Project O5X

As regulators are giving higher and higher fines to prevent money laundering and market manipulations with benchmark values and fixing points, the need to establish a well defined analytical framework to prevent such malpractice is crucial. The problem is not as much the available technology, but data access and real time visualization of such practice done by an independent supervisory body that also has authority in stopping transactions and charging individuals that designed such algorithms or human involvement. The malpractice shall be stopped when it happened and the authority shall not have to wait to discover methods and obtain data with days and weeks of delay.

As fines were given for old periods (with years of delay) the case is either the inability of the regulators in understanding the malpractice done in real time or inadequate know how of the loopholes of the regulative framework that allows the players to conduct such scrutiny to their investors. If some practice has been done for years, it is a necessity that the post festum data starts to be analyzed in more debth to establish profits and methods of market manipulations.

For such reason, I propose once more a mobile device, that will capture market data in real time and visualize where and how the orders are coming to the trading platform. Being aware that the detailed, insight into the trading activity is mainly hidden from the analytical side, to increase transparency, it shall be necessary to capture and analyze trading patterns of the registered traders and to have a deeper look into their activity with the analysis of profit generated margins (who and how much is going in and what was the decision being set from the investor and the trader).

As this is the fxcycle blog, I am almost certain that there exists such a thing as the trading cycle and the cyclical pattern like behavior of individuals traders in the fx market. I hope I am wrong, but first, I will have to prove that. :)

Project extension

Past weeks have been intense in realizing how many tools are already available to devlop clever solutions in providing financial transparency to the analysts. Visualization capabilities of centralized market data can give an insight of every outragious order going into the game and flag the transaction as suspicious linking it to the source. So my question at the moment is: If we take into account all instruments that rely on a "fix" system placing real time visualization tool on incoming orders, it would fastly provide a clue wether or not market manipulation is taking place and spotting exactly the order sources. So, if manipulation was taking place on such important and prifine instruments as exchange rates, it is doubtful that other instruments relying on the fix system would not be a subject of such scrutiny. Would such monitoring bug be efficient in spotting machine manipulations as well?