MT4 is facing stiff competition from new platform technology in its most dominant market – the Far East
New, API-based trading platforms are making massive inroads into the Asia Pacific region, and eating into the massive market share that MetaTrader has held onto for a decade. EA compatibility, it seems, is not enough.
Retail traders in the Asia Pacific region and the MetaTrader 4 platform have been in an almost inseparable alliance for over ten years now, indeed ever since the rise to popularity of the now ubiquitous platform, with traders metaphorically joined at the hip to its developer, MetaQuotes, largely due to the reliance on automated trading via Expert Advisors (EAs) which are robots that plug into the platform.
In South East Asia and parts of mainland China, the use of trading robots is widespread, and the MetaTrader 4 platform’s compatibility with them has ensured almost unfaltering loyalty among traders and brokerages wishing to provide service to South East Asian clients, even if the platform has had to be modified via the use of third party software from its original format to meet the requirements of today’s modern, direct market access brokerages.
For firms which have gone down the direct market access route and are now providing a trading environment that almost emulates that of the institutional sector, in which traders are accessing Tier 1 aggregated liquidity and high speed live-market execution, the ability to continue to offer MetaTrader 4 to the vast majority of clients has required considerable operation and engineering considerations, including having to operate separate MetaTrader servers for each office in each region, and due to MetaTrader 4’s lack of FIX API connectivity, specialist liquidity bridges, order and risk management systems and integration solutions have had to be developed and subsequently capitalized.
During this decade-long reign by MetaTrader 4, new platform technology has emerged that connects via API directly to brokerage systems and liquidity feeds, however, such platforms have thus far struggled to topple MetaTrader 4’s gargantuan dominance, until now.
The Far East’s retail electronic trading sector is rapidly evolving, and with Singapore having overtaken Hong Kong as Asia’s number 1 financial center, placing it as the third largest financial center in the world today, the demand for new technology is increasing, emanating from Singapore, which is Asia’s largest interbank and institutional FX center.
One particular example of this is NetDania, the Danish firm which develops the NetStation platform.
In December last year, FinanceFeeds met with NetDania Markets CEO Jonas Nielsen in Copenhagen, to look at the latest developments of the NetStation platform.
“Most of our end users fall into two categories: corporate users of white labels for information terminals, and retail clients of brokers taking our platforms. We have a many trading white labels with CFH Clearing as the liquidity provider. We also have white label partnerships with EBS ICAP on the mobile side. The app is called Watch EBS, and it is a NetDania platform” said Mr. Nielsen.
NetDania maintains its Scandinavian ethos in that its mobile application is bespoke and is being not only used by retail traders, but professional and institutional entities also. One particular example is Sungard MarketMap which, whilst the terminal itself is proprietary and entirely owned and developed by Sungard, the MarketMap mobile application is supplied and developed by NetDania, as in the case of EBS ICAP.
On this basis, its credentials are well suited to a large and experienced market such as South East Asia.
The company has a white label partnership in Malaysia, that being Mocaz Financial Markets, which provides FX, indices and commodities. Speaking today to Mr. Nielsen with regard to why traders in South East Asia are selecting specialist platforms such as NetStation when the whole region has been so loyal to MetaTrader 4 for so long, it is becoming clear that certain functionality is now becoming a focus of attention for traders in the region.
“For sophisticated manual traders, the NetDania platforms are a very popular choice” explained Mr. Nielsen.
“With regard to traders that are used to the MetaTrader 4 platform, NetStation provides more flexibility and chart functionality. It has excellent alert services and pattern recognition, and we should not forget the large segment of MetaTrader 4 traders that are primarily using MetaTrader 4 for manual trading, having either quit the cycle of looking for the perfect EA, or never been into it” – Jonas Nielsen, CEO, NetDania Markets.
“For the broker the NetDania NetStation provides differentiation over MT4. In the Asian market we have seen it deployed as the step-up platform” concluded Mr. Nielsen.
Last week, James Glyde, Business Development Manager at Spotware Systems was in Singapore and conducted several investigations into this, his perspective on the future evolution of trading platforms in the region.
Spotware Systems is the developer of the cTrader Suite which is an all inclusive trading platform suite and is operated by a number of global brands in the retail FX space and supplied by Spotware using a very modern Platform as a Service model.
On the topic, Mr. Glyde explained to FinanceFeeds “Mr. Glyde explained “Brokerages in the APAC region are now finding that their traders have far more interest in the actual ergonomics of a platform, rather than one single element such as its compatibility with EAs of legacy technology.”
“Asia has a very young population of investors, who are tech savvy and not only programming their own robots but have the skills and know how to convert EAs of other platforms into other languages such as c# as used by modern trading platforms, cTrader included. Furthermore, these young and keen investors are developing their own applications using cTrader Open API and sharing these tools and experiences with their peers” – James Glyde, Head of Business Development, Spotware Systems
“A final key point is that Introducing Brokers are producing their own proprietary trading systems whether it be a robot or an application in order to create a unique selling point to acquire and retain referrals for their brokers. New technology is a key differentiator and providing that framework is well appreciated by both developers and IBs in the APAC region” concluded Mr. Glyde.
For this reason, platform diversity is on the cards in Asia, and going past the traditional idea that EA compatibility trumps all is now a must in order for platform developers to keep a toehold in the most rapidly growing region in the world for the FX industry.