Electronic trading, which is currently one of the most popular methods of capital increase, is a complex infrastructure of interconnected systems that work on the basis of mathematical algorithms and provide fast convergence of orders, allowing you to carry out the process of trading in various financial instruments. The connecting link in this infrastructure, which connects the platform to liquidity providers, is a liquidity bridge, the most prominent of which is MT4. MT4 bridge providers supply this technology.
What Exactly is a Liquidity Bridge?
The liquidity bridge serves as a central link between the liquidity provider (LP) and the trading server of the MT4/5 platforms. Special bridge Forex vendors supply this software.
- The liquidity bridge’s duties include receiving quotations (prices) from the liquidity provider.
- In addition, the liquidity bridge usually processes received prices.
- It might be filtering and transformation before transmitting quotations to the trading server.
- The liquidity bridge also gets trade requests from the trading server.
- The bridge performs the incoming trade request internally or sends it to the liquidity provider, waits for an answer on the trade request execution, then communicates the outcome to the trade server.
It turns out that the liquidity bridge is a component that hides the specifics of the trading server and liquidity provider activity from each other and integrates them into a single system. As a result, the word “bridge” was coined. Furthermore, the liquidity bridge contains several options that can be adjusted via the user interface, which is represented in the ability to store reports on trade activities.
In general, this is a set of computational methods that function on a certain model; the whole system appears to be simple. There are several forms of liquidity bridges that are implemented as a plugin to a trade server. However, such a system does not scale well in the future, for example, when dealing with a large number of trading servers.
4 Factors to Consider When Choosing an MT4 Bridge
A few considerations must be made while selecting an MT4 liquidity bridge. The following are the most important ones.
Supported Number of Liquidity Providers
Businesses should not be tethered to a product that does not allow them to grow or improve their business models. Consider the likelihood that you will wish to offer your clients some unique cryptocurrency combinations one day. As a result, you should ensure that your bridging solution not only provides access to liquidity providers that presently provide attractive terms of collaboration, but also gives you the option to create additional connections in the future.
Because bridges are an essential component of your trading infrastructure, you must maintain ongoing touch with your MT4 bridge provider. MT4 bridge providers may publish evaluations on third-party websites or on their own websites to assist you acquire a better idea of their capabilities. You could also Google the firm and ask its current clientele if it has a dedicated team of specialists offering help. Are such persons able to deliver clear responses to their clients’ inquiries in a short amount of time? Is there an emergency phone number?
To make sure you don’t overlook any potential future hidden expenses, take your time going over price plans and contract drafts. Spend some time getting to know trade volume and setup expenses. If there is a monthly fee, make sure to ask what it is. Find out how much it will cost to join a new exchange or source of liquidity. Any product bundles, unique promotions, and other special offers that could be provided should be noted.
MT4 Bridge Performance and Speed
A market business attempts to provide its clients with the most quick execution of transactions and data feeds feasible. What are the best ways for testing and measuring it? Try out the solution on your own by requesting a trial period and seeing how it works. The procedure of doing multiple tests will only take a few days. Using a stopwatch is the quickest way to determine the exact pace of order execution.
Top 5 Liquidity Bridge Suppliers
There are several liquidity bridge suppliers on the market, but let’s look at the most well-known.
Devexperts creates software to automate financial, brokerage, and exchange processes. Among their initiatives are systems for online trading on stock and Forex exchanges, financial document management systems, technical analysis tools, and real-time market information services.
Devexperts is actively developing the company’s core product, a financial trading platform. The product is both a “box” offered on-premises or through SaaS and a “framework” for private solutions for brokerage firms.
Centroid Solutions is a fintech firm that focuses on risk management, quantitative analytics, sophisticated execution techniques, and multi-asset financial broker connection solutions. It provides Centroid Risk, a business intelligence software that provides a simple GUI (graphical user interface) interface for monitoring and analyzing the company’s risk exposures and trading activities, as well as Centroid Bridge, an engine that provides order routing and execution, liquidity management, and reporting for a multi-asset platform.
Advanced Markets is a wholesale provider of liquidity, credit, and technology solutions to brokers and institutions that offer FX, metals, energy, and CFD traders. In addition, the firm provides a liquidity bridge. The firm’s products are currently used by prominent brokers and banks in the Americas, Europe, Asia, Australia, and New Zealand.
oneZero is a company that creates corporate multi-asset trading technology for retail brokers, institutional brokers, banks, and liquidity providers. Access to liquidity bridge Forex technology is provided by the firm. Their platform is made up of three components: the Hub, the EcoSystem, and the Data Source, which work together to create a comprehensive solution for trading technology, distribution, and analytics.
Trading financial assets has become an extremely popular way to make money in today’s world, but despite its ease of access, it is a complex process of designing, placing, matching, and executing orders between buyers and sellers of an asset. The liquidity bridge is critical in this process because it connects liquidity providers and trading platforms, which is required for the development of the necessary infrastructure for electronic trading in financial markets.