FXCM’s newly relaunched institutional business embraces MetaTrader 5

In April this year, North American electronic giant FXCM began embarking upon the relaunch of its institutional division, FXCM Pro.

This marked a milestone as the company’s institutional division, which was led for quite some time by prominent industry figure Francois Nembrini during his twelve years at FXCM, was initially established in 2004 and had offices in New York, alongside avantgarde ECN FastMatch, of which FXCM owns 35%.

Not a company to rest on its laurels, under the leadership of highly astute senior FX leader Drew Niv, the relaunch of FXCM Pro intended to involve the division providing high and medium frequency funds access to prime brokerage via FXCM Prime, with a minimum deposit of $250,000.

Today, the firm’s institutional division has realized the importance of adopting the new technological methodologies that have begun to take shape this year, this time with FXCM Pro becoming integrated with MetaTrader 5.

MetaQuotes today stated that this particular native connectivity gateway developed in house by MetaQuotes provides reliable data exchange between MetaTrader 5 and the liquidity provider’s software. The gateway enables brokers to connect to FXCM Pro in order to receive market data and execute trade operations on the provider’s side. The benefits of the direct connectivity to global liquidity providers are obvious: brokers can hedge Forex orders through access to the interbank markets while providing better pricing to their traders.

Brandon Mulvihill, MD and Global Head of FXCM Pro today stated

“FXCM Pro is excited to be among the first liquidity providers to complete a custom integration to MetaTrader 5. Once again, MetaQuotes is at the forefront of delivering tools based on client demand, which center around speed and transparency of execution. Our joint integration removes the need for an external gateway, thus cutting latency times and allowing customers access to an FX/CFD liquidity pool that generates on average over $14 billion of volumes and over 550,000 trades, daily.”

“We are committed to providing our clients with connectivity to the best global liquidity providers in the forex and stock markets,” said Renat Fatkhullin, CEO of MetaQuotes Software Corp. “We continue to expand the possibilities of the mutli-asset MetaTrader 5 platform for institutional investors, and we will release more gateways soon.”

MetaTrader 5, whilst having been available for some five years already, has only this year begun to gain traction among large, mainstream brokerage operations. One specific application is its recent connectivity to futures exchanges. There are now ten examples of MetaTrader 5 being connected to Dubai Gold and Commodities Exchange (DGCX), however since the addition of the ability to hedge, MetaTrader 5 has become more of an interesting prospect for retail brokerages.

As far as its predicted entry into the mainstream this year is concerned, some of the technologists which provide liquidity bridge and integration solutions that connect MetaTrader platforms to the live market have been on the pace with this.

During a meeting in London this year, FinanceFeeds spoke to Tom Higgins, CEO of Gold-i with regard to the reasons why MetaTrader 5 is about to take off, who explained “With MetaTrader 5 now able to provide hedging facilities, it now means that it is a very viable alternative to MetaTrader 4. It is a much better platform but until now, traders could never move to it because they require hedging” continued Mr. Higgins.

Integration technology will cause migration from MT4 to MT5 – the landscape is about to change globally

Mr. Higgins then explained that, once the integration technology has caught up, this will cause MetaTrader 5 to offer hedging as well as provide a far better experience for brokers and traders alike.

“There is a lot of work required on the side of the software vendors, but once that has happened we will be migrating people from MetaTrader 4 to MetaTrader 5 as a service and it will come with Matrix 2 as well as our bridge and other products like MAM that we will bring across to MetaTrader 5″ revealed Mr. Higgins.

“Within six to nine months our MT5 integrations will be fully productized and all the LPs that we have integrated with on MT4 will also be available on MT5. However, we will start to see new brokers just taking MT5 and this will change the landscape substantially” he said.

Another vitally important difference between MetaTrader 4 and MetaTrader 5 is that companies do not need to host a separate MetaTrader server for each of their offices in different regions, as the architecture is more scalable and MetaTrader 5 is a clustered system, therefore if you want to scale your brokerage up, you can add more servers and it just gets faster. With MetaTrader 4, the system consists of independent servers, so you have to add more servers with individual risk management, individual trading for example, which means several separate environments rather than one homogenous one with MetaTrader 5.

“Additionally, MetaTrader 5 has an unlimited number of symbols to trade, and it is feasible to add unlimited options, equities, futures, FX, whereas with MT4 it is a flat stucture with a maximum of 1024 symbols” said Mr. Higgins during the meeting.

In April 2015, FXCM announced that as a separate matter from the institutional non-core assets the firm has announced planned to sell, the company will continue various institutional services.

At that time, FXCM’s Institutional department, FXCM Pro, was set to focus heavily on its wholesale business, which would continue catering to retail brokers, small hedge funds and emerging market banks while FXCM’s Prime of Prime business, FXCM Prime, was set to focus on high frequency trading customers (HFTs).

Later that year FXCM looked at selling FXCM Pro, however the relaunch now encompasses FXCM’s return to strength as a leading corporate entity.

At that time, Mr Mulvihill explained “We are thrilled to unveil our clearing solution within our new website. FXCM Prime provides clients access to multiple trading venues, allowing for direct relationships between traders and liquidity management experts at each ECN provider. FXCM Prime fills the void of settling trades done across all platforms, with over 15 platforms available to clients. This agnostic approach is exactly what tier one prime brokers provide, and this is a rare service found in the secondary prime market.”

Photograph: FXCM headquarters, New York. Copyright FinanceFeeds