The voice from within: What factors really matter in an FX trading platform?

Just as the attractively arranged display in the front window of a department store provides the critical and enticing visuals which aim to draw a potential customer base away from the array of competitors vying for business on the same floor of a mall, the user interface and features first seen by a customer of a retail FX company on a trading platform perform a similar, and essential, role.

Long before a trading account is funded and the full functionality of a platform is appreciated, the initial role of the trading platform is to go one step further than a company’s website and branding, and to engage traders with ultra-modern features and ergonomic sophistication in order to retain their business.

Such an analogy is more poignant these days, with traders in the retail sector often resorting to highly technologically advanced methods of trading. Gone are the days in which a world of novices were victims of their own naivety, and well and truly here are the days of third party software, analytics, automated strategies and, in some cases, applications, developed by the traders themselves, to give an advantage.

As any trader or FX industry executive who has ever been privy to the trading environment in China or Japan, both of which are polar opposites yet represent the leading edge, will likely agree that entering the office of a portfolio manager or introducing broker in even the most provincial Chinese town is like landing on the moon and then discovering that its inhabitants are 20 years ahead than anything seen on terra firma.

Last year, Tradable CEO Jannick Malling hosted a hackathon in conjunction with Japanese electronic trading giant Monex Group, Inc. (TYO:8698) in which intrepid developers made their own applications and tested them on the Tradable platform, with some remarkably innovative results.

A year on, which, bearing in mind Japan’s propensity toward rapid development is a very long time, this is likely to be a method which will strike a chord internationally among developers looking to obtain an edge with their trading.

James Glyde, Business Development Manager at Spotware Systems, provider of the cTrader and cAlgo platforms today met with FinanceFeeds to take a close look at the important factors to consider when choosing a platform, both from the perspective of the brokerage wishing to onboard clients, as well as for traders.

When asked why platform diversity is important, Mr. Glyde said “I love this question, it gets thrown at every service provider in the industry and unless the recipient is a platform developer the response is little more than a shoulder shrug. So I’m glad you threw it at me!”

“Brokers are always seeking new ways to differentiate themselves from their competition and develop their image to attract new traders, the key concepts used are transparency, interest alignment, high standard of trading infrastructure, superior customer support, execution model and execution speed. It is my opinion that all of that is meaningless when they are just words on a website, brokers should show that they mean those words by offering a trading platform which supports all of those sentiments, since it is the platform which the trader interacts with 99% of the time therefore it is so important that they appreciate and enjoy everything aspect of it and not give a weak attitude of “it does the job” or “one size fits all”.

“At this point in time, a broker’s trading platform is one of the last elements of their business they can alter to make them stand out from the crowd. Has anyone noticed that the “retail brokers” making it to the front pages of our favorite industry publications are offering something more than the ones which don’t make it there, indeed they are, they have a nice selection of trading platforms” is Mr. Glyde’s perspective.

How the evolution toward algo-focused platforms is a point which brokerages should look closely

Examining the ethos behind the adoptation of aglo-focused platforms, Mr. Glyde said “Not to state the obvious but, Algo traders are a key element to any brokerage because they are a source of steady income from frequent trading by their automated robots, these traders are educated and experienced which makes them relatively autonomous, by this I mean they will reserve dialog with their broker for genuine issues, they are not bonus hunters, they know exactly how long transactions should take so this saves time resources for the broker.”

“They know exactly what they want and put a lot of effort into researching their broker, VPS service provider and of course trading platform, for these reasons Algo traders have high expectations from their partners and they are right to expect it. We wanted to open the opportunity of programming trading robots to as many traders as possible because we saw exactly how important those traders are to our clients, this is why we opted to use a modern c# API for traders to code their cBots and custom indicators for cAlgo.”

At this point, bearing in mind that diversity is the current factor, FinanceFeeds asked Mr. Glyde if he considers cAlgo to live up to algorithmic traders high expectations. “We understand the needs of Algo traders which is why we created cAlgo as a stand alone application to make sure that we were not limited on the number of features we are able to offer. Since many algo traders main source of income is in fact their trading, it was pointless to develop a platform that wasn’t efficient, comfortable and of course powerful. We also loaded it full of time saving features to allow those traders to bypass many time wasting restrictions which are prevalent in other platforms. cAlgo should be considered an all in one work station for developing, testing and running trading robots and custom indicators” said Mr. Glyde.

Specific support and technology relationships between platform providers and brokerages are essential in order for FX brokers to keep cost down yet don’t want to involve themselves in support. Ont this matter, Mr. Glyde explained to FinanceFeeds “This is another interesting topic! I couldn’t count on a single hand the number of different vendor relationships which are required to maintain some other platforms; bridge providers, hosting providers, multiple plug in providers, other platform providers (web trader & mirror trader). So many things to integrate and manage when all of these relationships originate from one goal, to cut costs on development, infrastructure, recruitment and staff, all of that seems way too complicated and counterproductive, when you can get an all in one solution which charges based on your usage.”

“I believe that how Spotware deliver the cTrader Suite which is through a Platform as a Service model is the ideal solution for brokers, it not only drastically cuts costs through reduced labour, hardware and maintenance, this model reduces a number vendor relationships which also puts a toll on management, operations and finance departments. Because we include 24h support to our broker clients and have a constant line of communication regarding new features and updates we give our clients everything they need to bypass unnecessary costs which are strongly associated with other platforms from consumption of resources and architecture requirements.”

“Customer support is an expensive and important service which brokers must provide, they are on the front lines and are dealing with sensitive issues, typically their clients investment. Since one bad forum posts outweighs 10 good ones, brokers can’t afford to cut corners here. So I would like to mention that we respond to thousands of messages from traders each month via our feedback forms inside all Spotware platforms, cTDN forum or via email, all of these are queries which otherwise would have been directed to a broker’s support staff, acting as a filter so brokers receive only the most delicate questions” concluded Mr. Glyde.