It is no secret that a broker’s goal is to provide the client with the highest quality service. The main relevant criteria are: order execution speed, no requotes or slippage. In other words, the client needs total liquidity.
A liquidity bridge is software that links a client’s terminal to liquidity providers.
How does this plugin work?
1. It directs the flow of quotes straight from the liquidity provider to the client’s terminal without a broker’s participation.
2. It directs the flow of orders from the terminal to the liquidity provider.
The basic MT4 platform functionality does not support direct access to the interbank market, and Metatrader bridge plugins have solved this problem.
What are the benefits of a liquidity bridge for a forex broker?
In addition to the obvious advantage of increasing the number of loyal customers, there are other benefits for the broker from using the MT4 bridge plugin:
● Reduction of operational risk through automation of certain processes, i.e., volume consolidation and allocation, swap renewals, group setup.
● Ability to automatically switch between A/B books – this option allows the broker to control profitability and move away from the risks associated with changing market conditions.
● Formation of reports in the MySQL database – required for coordination of work with regulatory authorities.
● Service monitoring system integrated with technical support – the broker needs to be aware of all events and respond to them quickly.
Five vital parameters to consider when choosing an MT4 liquidity bridge.
The choice of software requires a serious approach, since mistakes can cost you customers, money and reputation.
What to look for when choosing a software provider:
1. Risk management functions: the ability to redirect between A/B books, identify “incorrect” groups, etc.
2. Flexible rule-setting option: margins, slippage and delays.
3. A friendly white-label interface – an affiliate program that allows you to connect other brokers through a liquidity bridge.
4. Additional aggregation opportunities: how risk hedging strategies work.
5. Technical support quality. First of all, it is 24/7 availability.
How to make the right decision
Brokers are well aware of how the industry works from the inside, and every company in this business has a risk management system in place.
Let us offer some advice: brainstorm when choosing a software vendor: it’s important to recognize the points that are critical for your company.
Conduct a comparative analysis of connection and service prices.
Examine case studies and testimonials from connected clients.
Great overview of liquidity bridges for MT4. Are there any other risk management solutions out there? Would be great to learn about those as well.