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deliver speedier pricing and trade execution, although Sanjaq believes that bridging does create issues in terms of the response times in FX trades.
“Liquidity bridging provides fair and friendly trading environment to traders and almost a risk-free business model to brokers, giving them opportunity to re- allocate resources into development, support, and marketing activities. However, fast execution does not necessarily mean fair execution, because bridging increases the distance between the trader and the execution venue, which delays the response time (few milliseconds) as the trade travels a round trip from the client interface to the broker’s server and from the broker’s server to the liquidity provider. While on Dealing Desk, the broker’s server is the final destination of the trade. Terefore, FIX Protocol-based platforms are the fastest and most reliable for HFT where no bridging is needed,” says Sanjaq.
FXCC has, like many retail FX brokers, taken steps to provide a DMA platform to cater for the ultra low latency seeking high frequency algo traders. “At FXCC we started with the infrastructure by utilising high-performance hardware and network. Ten, we deployed a reliable FIX protocol based platform (Currenex) in addition to connecting MetaTrader to our liquidity, leaving the option for traders to choose based on their preferences.”
Automated strategies
According to Tim Brankin, vice president at Divisa Capital, a New Zealand-based FX broker, retail FX traders are using Expert Advisors within MT4 platforms as part of a general move to automated strategies but they are also realising that tight spreads and efficient execution are integral to the efficiency of these tools. “Tey realise that good spreads are useless if they constantly experience trade slippage and rejections. Traders are looking for brokers who can accommodate their trading strategy most effectively.”
164 | january 2012 e-FOREX
In order to provide an environment conducive to these retail FX traders Divisa has not only formed links with top tier banks but has its own technology division, TradeSpot FX. According to James Mason, president of TradeSpot FX, technology is the traders life line, most traders don’t realize how much happens behind the scenes when they hit the “buy” or “sell” button. It all comes down to latency and execution speed, a broker is only as good as it’s tech. “Divisa currently uses TradeSpot FX’s liquidity bridge which confirms trades at millisecond speeds ensuring a client’s trade is executed and filled with minimal slippage.”
Tere are many factors that traders assess before choosing a broker, says Mason. “Tese factors include the obvious criteria such as spreads, reliability, execution quality and customer service. However, as mobile technology evolves and becomes more robust, traders are demanding more from brokers in terms of connection options. Traders not only want to be able to monitor the market when they are away from their main trading station, they also want to have the ability execute trades from a multitude of channels such as web and mobile- based platforms seamlessly and efficiently.”
For this reason, TradeSpot FX offers an array
of solutions including Web Trader, iPhone/iPad, BlackBerry and Android compatibility allowing the trader to make the final decision on what’s most important to them, says Mason. “Each technology has its advantages and disadvantages. While Desktop and API platforms are the fastest and most robust, mobile and web-based solutions offer accessibility and mobility when needed. Te key is to give the choice to the customer and allow them to concurrently use any one of these technologies to access and trade their accounts.”
Speed, reliability and functionality
Tere are similar factors at work among Divisa’s client base, says Brankin. “We offer our clients access via
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