Trading platform market share war hots up as MetaTrader 5 goes viral in Asia
MetaTrader 5 is at last gaining a foothold in the very fast moving markets of Central Asia and the Far East, after some six years of living in the shadow of MetaTrader 4.
MetaTrader 5 has been thus far regarded as something of a white elephant project by MetaQuotes, its popularity having been restricted to certain regions, and in very limited circulation since its launch in 2010.
By absolute contrast, MetaTrader 4, which was intended to be superseded by MetaTrader 5 some six years ago, dominates the front end of the entire world’s retail trading infrastructure, accounting for over 70% of global retail FX trading platform market share.
This is even more remarkable when considering the number of large brokers that have proprietary trading platforms yet still offer MetaTrader 4 alongside them, and that the development cycle of technology these days in the FX industry is now a matter of months rather than years.
MetaTrader, in this case, is an anomaly, as the current dominant platform at the coal face of the world’s most highly sophisticated trading technology is an eleven year old platform, whose successor is already six years old, yet behind the platform is a constantly evolving, leading edge ecosystem developed by various companies which are at the forefront of innovation that connects the ubiquitous platform to brokerages, liquidity providers, Tier 1 banks, ancillary software that automates trades and follows signals, and cloud hosted low-latency infrastructure that mimics the institutional world.
Many reasons for this peculiar industry-wide wish to hang onto MetaTrader 4 exist, one main factor being its compatibility with Expert Advisors (EAs) which are particular popular in the Asia Pacific region, another being ease of attracting clients from broker to broker if they are already familiar with what has become a ‘default’ platform, however the hindrances are as prominent as the advantages, MetaTrader 4 having had to be adapted by third party specialist software developers in order to connect it to live markets via liquidity management systems and bridges due to its original design in 2005 having been that of a closed system, only to work with its own server and dealing desk, with no orders ever intended to be sent to a live market.
Another matter is MetaTrader 4’s inability to operate in multiple locations via one server. During the past few years, many retail brokerages expanded their operations across many continents, a dynamic that was not prevalent when the MetaTrader 4 platform was originally launched, and therefore being restricted to one server per location was not an issue.
Today, brokerages using MetaTrader 4 need to have separate servers for each location, whereas with MetaTrader 5, only one server is required to serve multiple locations.
Whilst interest in MetaTrader 5 remained very low during its first few years, with just a few brokerages in Russia having managed to onboard any significant level of client activity, a massive surge forward in popularity is coming about, largely fueled by the Asia Pacific region, which is perhaps odd because that is the exact region in which the Expert Advisors that continue to bolster MetaTrader 4’s popularity are commonplace.
Interest in the platform in Russia continues, as Solid Financial Services has now taken on MetaTrader 5 following the updating of the system to offer hedging, following its compatriots Alpari, FXChoice and RoboForex which have made headway with the platform.
Interestingly, exchange traded FX has become a matter which, although discussed among many senior industry professionals during the course of recent years in the Western World, at times when it was considered that regulators may push retail FX onto exchanges in certain jurisdictions, the Middle East and Asia has gone down this route, using MetaTrader 5 as a front end.
Emerging exchanges such as the Dubai Gold and Commodities Exchange (DGCX) have been of great interest to brokers wishing to connect retail platforms to such venues of late, with MetaTrader 5 being the latest platform of choice.
Interestingly, 10 brokerages have connected MetaTrader 5 to DGCX so far, and now other venues in the region are garnering interest. DGCX is very poignant as a choice, as it hosts over 35% of all global exchange traded Indian rupee trading activity.
PMEX, which is an acronym for Pakistan Mercantile Exchange, now has ACM Gold’s MetaTrader 5 platform connected to its execution facility, which is a very unusual venue indeed. ACM Gold is one of South Africa’s most prominent brokers, however it was founded by Pakistani national Irfan Pardesi, and had garnered substantial client traffic from the Indian Subcontinent.
Indeed, in Western markets, exchange traded derivatives are often reserved for the highly capitalized global electronic market places of Chicago, however in regions with emerging exchanges, MetaTrader 5 appears to be in favor at the moment.
An interesting dynamic indeed.