The development of technology has changed the way financial trading operates: modern trading portals have a complex structure of integration, software, and information exchange. Application programming interface (API) is a crucial element of trading software, as it simplifies the exchange of data with markets, servers, and information systems. Below, we will discuss financial information exchange (FIX), one of the most popular platforms for dealing with data and profits of FIX API.
What is the FIX Protocol?
FIX is an independent virtual communications protocol that enables actual securities transaction data exchange, regardless of participants’ location. This protocol is utilized in the particular community, which includes more than 300 members and well-known banks.
Today, FIX is the data exchange standard within the framework of pre-trade, trade, and post-trade interactions and US regulations. It can be successfully combined with the most popular network systems. FIX Protocol, Ltd. owns the structure. It was launched solely to solve such problems and ensure the system is in the public domain.
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How does FIX API Work
If you carry out financial activities in the Forex environment, you most likely transact through an intermediary portal.
However, participants who prefer the FIX API do not have a portal to interact. You should create your portal, interface, or mechanic to transmit messages and study data from the FIX API.
Your structure may be basic or complex, depending on your needs.
The FIX protocol contains a list of predefined messages with a set of fields. The receiving party must have a decoding dictionary to realize the meaning of the transmitted information.
Today, various FIX mechanisms significantly decrease developers’ time in creating a data transfer structure, allowing them to concentrate on the specifics of the application and business operations.
FIX API vs. REST API
REST (Representational State Transfer) is a set of indicators computer engineers use to create new digital products. Compared to FIX vs rest API, the representation technology does not focus on financial aspects.
We can evaluate an API as RESTful if it meets some standards:
- Availability of a single interface and identified resources.
- Interaction according to a client-server structure that allows clients and servers to function independently of each other.
- All responses are marked as cacheable or non-cacheable. If they are cached, clients may use them again.
The REST API contains many different layers.
The REST and FIX APIs are suitable for working with trading pairs. These advanced frameworks are popular among GitHub trading platform creators.
Advantages of FIX API
The popularity of the FIX API is due to its being a free solution, and it will always be so. Don’t forget about other strengths of this solution:
- Correspondence. FIX applies to different types of assets. Not all participants utilize the full range of accessible messages. Often, the intermediary or marketplace will communicate standards for notification usage.
- Speed. FIX messages are designed to ensure maximum savings. This means messages are delivered quickly and do not require high throughput parameters, which is essential because these notifications often occur with high frequency.
- Comfort. Creators of shopping portals can use different programming languages that interact with socket communication.
As the financial market develops, the demand for FIX API will increase.
Limitations of FIX API
Don’t forget about some of the restrictions of FIX:
- Version problems. There are different standard implementations of FIX. After each system modification, you must update the protocol to the latest version.
- Complexity of the structure. The handshake algorithm is sophisticated since we have a bidirectional system with multiple participants. A control signal is necessary; otherwise, the connection may be broken.
Remember that to conclude a transaction in the system, a minimum volume must be met. To operate, the quantity and cost of the order must exceed the minimum value.
Benefits of Using the FIX API
Financial institutions view FIX as a reliable solution for maintaining relationships with clients, partners, and the marketplace. Such systems are also popular among independent industry participants. Let’s look at the primary profits of the protocol:
- Flexible commercial instrument. Users can quickly develop different algorithms utilizing any programming language. Such systems may be connected to the marketplace through the FIX API.
- Complete privacy. Participants who choose such a protocol do not need to use commercial portals to run algorithms.
- Availability of multi-channel options. Users can utilize the FIX API to interact with multiple intermediaries over different virtual channels. The use of a single interface solves many troubles.
FIX API protocols simplify direct order execution and provide market liquidity, making them essential for sustainable growth and development. APIs connect directly to a designated server so participants may quickly and efficiently complete any transaction.
