MetaTrader 5 about to go viral globally – FinanceFeeds Investigates

Something of a significant moot point among traders and FX brokerages alike over the last few years has been the rigid way in which the entire industry, from technology vendor, to brokerage, to liquidity provider, right through to the end user has maintained its love affair with the ubiquitous MetaTrader 4 platform. The MetaTrader 5 […]

Exclusive: MetaTrader 5 about to go viral globally

Something of a significant moot point among traders and FX brokerages alike over the last few years has been the rigid way in which the entire industry, from technology vendor, to brokerage, to liquidity provider, right through to the end user has maintained its love affair with the ubiquitous MetaTrader 4 platform.

The MetaTrader 5 platform has been, until relatively recently, notable by its almost complete absence from the entire retail FX ecosystem, despite it having been launched in June 2010, to a wave of tumultuous silence.

In Russia, the MetaTrader 5 platform has gained a degree of popularity, but MetaTrader 4 has maintained its supremacy thus far.

In what is most certainly likely to be a landscape-changing development which is about to put the MetaTrader 5 platform into pole position, FinanceFeeds CEO Andrew Saks-McLeod met with Gold-i CEO Tom Higgins yesterday in London to find out how MetaTrader 5 is about to become the de facto platform from MetaQuotes.

Gold-i CEO Tom Higgins elaborates on new Broker360 back office solution
Tom Higgins, CEO, Gold-i

Mr. Higgins explained that the reason that MetaTrader 5 has not been widely adopted in its current format is due to the inability to facilitate hedging, compared to MetaTrader 4’s hedging functionality which is instrumental to the retail trader’s experience.

“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.

Want to expand your brokerage without more servers? Here’s how

As far as operational infrastructure is concerned, Mr. Higgins explained how MetaTrader 5 is a far more advanced product than its predecessor. “Nobody wants 2 platforms, and no technology provider wants to run 2 platfoms as it is expensive and time consuming.

“New 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” detailed Mr. Higgins.

“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” he said.

Paving the way for exchange-Traded FX?

Mr. Higgins is not only an industry reference point for retail OTC platform integration, but also has a vast array of knowledge in exchange technology, having been a senior technologist at LIFFE in London. Following FinanceFeeds’ recent investigations in the electronic derivatives venue heartlands of Chicago last week which, along with their own and third party software vendors are courting the retail audience, it was interesting to understand if this new technology and integration of MetaTrader 5 has exchange-traded retail FX aspirations.

Mr. Higgins said “MetaTrader 4 and MetaTrader 5 can be integrated to exchanges. In theory either platform can be integrated with major venues such as CME or ICE but this is uncommon because of the costs associated with such venues, including membership fees and clearing costs. There may well be virtual exchanges owned and operated by major derivatives venues which are aimed at retail FX in future, which will be very interesting and our system is ready for this, meaning MetaTraer users can trade options, futures, stocks, commodities and FX via all major venues.”

In conclusion, Mr. Higgins said “If you want to be a multi asset broker, this would be much easier with MetaTrader 5 because MetaTrader 5 is better for handling multiple products.”

“This is a Nirvana of a system, with best performance. It offers a muli-venue trading facility via one platform and a single margin account, across all assets including futures, options, equities, and FX, and is also mobile based.”

Photograph copyright FinanceFeeds

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