RETAIL e-FX CLIENT
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what is on offer in the institutional space? “In short, yes it’s technically possible to deliver low latency trading conditions to the retail space,” says Mason, “although, speeds are unlikely to match those in the institutional world anytime soon. Seeing that most retail environments typically have additional pieces of software (i.e. MT4, bridge, trade GUI) between the liquidity (banks) and the end client, not to mention the difficulty of implementation and high cost associated. In spite of the above, some brokers such as Divisa Capital are already going the extra mile making the necessary investments and technical improvements by hosting their trade server in the same data centre as their liquidity source and offering VPS services.”
“We believe that someday we will be able to deliver the same low latency trading environment enjoyed by institutional FX traders,” adds Brankin. While it may not be possible to deliver the exact low latency solutions that institutions have today, Brankin says that Divisa Capital is striving to replicate this performance through co-location in the hope that clients will be able to obtain connection speeds that at least rival those in the institutional world. Furthermore, Divisa Capital is also looking to offer a co-located VPS offering that, says Brankin, should “level the playing field further”.
Speed not only issue
According to Jeff Grossman, Managing Director at Squared Financial, an Irish-based FX trading
platform, retail traders are taking a more professional approach to FX trading and the demand to measure trade execution speed is part of that. “But there are also other factors that they are looking for from FX trading platforms - the reliability of trades, the range of tradeable instruments and the analysis tools and market information that is available. All of these factors are inter-related.”
Tere is a similar inter-relatedness in the factors that influence a retail traders’ choice of FX trading platforms, Grossman believes there are a number to consider. “Te platform has to be reliable, user-friendly ,intuitive and cost effective. If it is not, then all the speed and low latency will be irrelevant. Tere also has to be a level of transparency around the trading process and the rules of engagement in the market. Without this, traders will not be able to gather the trading analytics they need to evaluate the platform.”
Te maturing of the retail FX trading market has developed over the last three to four years says Grossman. A pivotal moment was in the last two to three years when semi-professional retail traders started looking for API access rather than the traditional GUI route. “I think the professionalism is just something that comes with time and experience. Once they have been survived in the market for a certain time, they learn critical lessons and one of these is the impact of platform performance on P&L. Te improvement in technology over the last few years has both facilitated and re-inforced the demand among certain retail FX traders to access the market in a more professional way.”
168 | january 2012 e-FOREX
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