FIX API

FIX API is a messaging protocol extensively utilized in the electronic trading sector. It is not limited to forex trading; rather, it is employed across stock, metals, futures, and options exchanges. This protocol is used by Tier-1 banks, retail forex brokers, and even individual retail traders.

FIX stands for The Financial Information eXchange, a project that began in 1992. It is an open messaging standard that is not controlled by any single individual or organization, allowing it to be tailored to the needs of each user. Clients and brokers connect using FIX engines, which facilitate communication through the FIX protocol. To initiate a FIX session, Client A and Broker B synchronize their engines at a predetermined time using a specified host and comp ID.

FIX, which stands for Financial Information eXchange, is complemented by API, a common IT term for Application Programming Interface. The FIX API is a non-proprietary, free, and open protocol managed by a UK non-profit organization known as FIX Protocol Ltd. Initially developed to support equities trading and replace phone trading in the early 1990s, the technology has since expanded significantly and is now utilized by thousands of electronic trading firms globally. While there are various versions of the FIX messaging protocol, version 4.4 is the most widely used.

The primary advantage of FIX API is that it is free, with the FIX community committed to maintaining this status indefinitely. Other key benefits include:

• Conformance: FIX is comprehensive and encompasses a wide range of securities. Not all users utilize every available message, as brokers or exchanges typically publish guidelines on message usage.
• Speed: FIX messages are designed to be lightweight, allowing for rapid transmission with minimal bandwidth, which is ideal for high-frequency trading.
• Support for multiple brokers: Users can establish FIX sessions with several brokers at once, enabling them to monitor trading conditions like spreads and liquidity and identify opportunities across a broader market.
• Convenience: Developers can use nearly any programming language that supports socket communication to create their trading systems.

While FIX API offers many advantages, it also has limitations. It provides a fixed set of transaction types that developers must follow, primarily focused on two categories: Real-Time Market Data and Order Execution & Management. Traders cannot query specific details about their trading accounts, such as equity, balance, available margin, or open/closed orders. Additionally, FIX does not allow access to historical market data, only real-time information.

Although the technology is free, not all forex brokers will grant access to trade via FIX API without associated administrative costs. This often results in certain requirements, such as minimum deposit or monthly trading volume criteria imposed by some brokers.

When trading forex, most individuals do so through a platform provided by their broker, such as MetaTrader 4, MetaTrader 5, or cTrader. However, trading via FIX API does not involve a platform; instead, users must create their own interface or algorithm to send instructions and receive information from the FIX API. The application can be as simple or complex as desired. Numerous FIX engines are available today, significantly reducing the time developers spend on creating transfer logic, allowing them to concentrate on application and trading logic. One popular open-source software library is QuickFIX. Below is an example of a logon message in FIX API:

8=FIX.4.4|9=126|35=A|34=1|49=theBroker.12345|57=TRADE|50=any_string|52=20170117-08:03:04|56=CSERVER|98=0|108=30|553=12345|554=passw0rd!|10=131|