MT4 is the most used retail foreign exchange trading platform in the market. By utilizing Metatrader 4 (MT4) server applications and providing client terminals to your current and prospective clients, you can greatly increase the size of your retail Forex trading business. Many brokerages reduce their market risk by implementing a Straight Through Processing (STP) model which effectively passes the trade onto a large liquidity provider. This is accomplished by purchasing a liquidity bridge that bridges their MT4 server application directly to the liquidity providers. This post is aimed at showing you some areas to investigate before selecting a vendor.
While the business of programing liquidity bridges between MT4 server applications and third party liquidity providers is relatively new, this question is still an important one to pose to any potential vendor. By nature, new technologies are prone to pitfalls, thus a technology company that has been programming bridges for four years versus two is far more likely to have overcome many unforeseen hurdles. In addition, new software is not easy to reverse engineer and reproduce. As such, the inventor of a software technology will overcome challenges and improve upon their package in each subsequent release, where as an imitation that enters the market will not have the benefit of this experience.
This question, as well as targeting experience points, seeks to determine the credibility of the technology vendor from a standpoint of follow through and long term stability. Especially with larger clients, deployment can be time and resources intensive, thus the vendor will need to have adequate systems in place to handle the complexities, and expertise to maneuver the challenges that are inherent in such deployments. Once deployed, the software itself will need to prove it can handle large numbers of FX trades and users, and there is no better proof than the firm’s customer’s production environment.
Hopefully the bridge vendor has already built a bridge from Metatrader 4 to the bank that you work with, and has done so in an easily replicable manner. Otherwise, you can use the vendor’s experience with bridging to other banks as an indicator of their proficiency at developing successful liquidity bridges. This experience in working with disparate bank systems is critical in ensuring that your deployment will be done expeditiously so that you can commence your Forex trading operation as soon as possible in a reliable environment.
Of course all bridges will pass trade information to and from the liquidity provider from your MT4 server application; however, there are many additional features and services that top-tier vendors can provide which will help you attract and retain more clients. For examples, certain vendors develop bridge functionality and MT4 Admin Plugins, that address multi-account management, support of multiple price feeds, and positive slippage, which you can in turn use to create a better and more diverse offering for your clients. Other services may include Expert Advisor development and Virtual Private Server hosting, which can in turn be offered to clients and add value to your service.
Forex trading almost never sleeps, and MT4 and the bridge software are critical applications for running your business, which should be reflected in the support provided by your vendor. Perhaps you are based in Australia, or maybe you have clients who actively trade well into the night from New York. In either case you’ll need 24 hour support while the primary markets are open. Look for a deep bench of highly qualified analysts that can take calls during support hours, not outsourced phone centers. Also, evaluate the vendor’s team to ensure they have strong market knowledge; they work with a number of brokers and can be a terrific source of information on a slew of subjects ranging all the way down to how to structure a brokerage’s organization chart. Finally, make sure that the vendor has a robust disaster recovery plan including fail over server sites, etc. This way, even in the worst case scenario, your downtime will be limited.
Hopefully these areas of insight are helpful in your search for a bridge vendor, please do leave your comments, and don’t hesitate to reach out to a Business Intelligence Specialist for more information about bridge technology.