What programs should each broker dealer have?
Modern brokerage business has significantly adapted to the current market conditions. For the full functioning of the forex broker, a phone or a telegraph tape are no longer needed to make a deal. We, the traders, have phones to do the trading operation and everything related to it thanks to the development of information technology. To date, the entire trading process is represented by various automatic programs and technical elements that determine the quality of the broker. Therefore, the struggle for the client in the brokerage business has turned into a struggle for the availability of the modern software solutions that will provide the most qualitative trading conditions. And we can only observe and choose the best.
But in my opinion, it has become much more difficult for the broker to manage his client base, because the abundance of various software solutions also provoked the need constantly, 24/7, to monitor all the applications and to ensure that all the transactions from the clients to the broker were immediately executed to make the part of the transactions blocked in the market, and part of the inside of the server. Also, it caused the need to correctly display the current market situation, which affects the trading of many traders. In addition, the “transfer of the business to number” caused the need to manually control all the trading processes, because if the customer used to go straight to the market, the transaction was fixed, and today it must be concluded and processed automatically. But nevertheless, this machine must also be analyzed and maintained.
To successfully implement these goals, the broker uses a dealing center, which is a sort of “oversight” of all the trading operations and is responsible for correct execution of the trading orders. Of course, if we are talking about the large brokers that have tens thousands of customers, it would be extremely difficult to even monitor the staff of 100 people. That is why, in the arsenal of dealing there is also software, which allows to conduct a comprehensive analysis.
In support of dealing, various software was created: from various systems for catching hijackers and arbitrators to a banal work terminal. However, I consider that the most cost-effective software for dealing is a liquidity bridge http://4fxbrokers.com/mt4-bridge/.
Such companies offer software, which just helps the dealing to conduct a comprehensive analysis of trading operations and immediately respond to the emergence of the brokerage risks, which can happen quite often.
So, it is possible to carry to the list of brokerage risks:
1. Excessive trading volumes. If the clients of the broker will trade by an average volume of a lot, then any big bias with the arrival of a large client who will trade with a volume of 50 lots may also pose risks to the entire brokerage business. To do this, it is necessary to overlap such volumes in the market and earn exclusively on the trading activity and commission of the client.
2. Use of algorithmic programs. As we all know, there are high-frequency algorithms that can, at the expense of a huge number of operations, show tremendous interest rates of return. Often, it is difficult for the broker to overlap even the minimum volumes of the robot because the number of such operations can deviate significantly from the norm. To do this, analyze all the transactions and “catch” such algorithms so that in the future all their operations can be delivered directly to the market execution.
3. Trade with exotic financial instruments. Likewise, as with large volumes, there may be a bias in the context of one financial instrument. This nuance arises in case when only one client starts to trade on the instrument that the other clients of the company do not trade. Often, these can be currency pairs of GBPSGD or USDNOK type. The execution of transactions on such instruments should immediately be delivered to the market.
Bridge technology allows you to optimize these risks with the help of liquidity bridge and market overlap, which makes it possible to implement such a program.
The bridge functional should contain all the necessary tools for the full functioning of the dealing:
1. Realization of monitoring of all open trading operations, which allows you to track both old and new transactions. Dealing should track not only the result of the operation, but also by what method the transaction is implemented, and what commission and floating p\l the broker gets.
2. The ability to make transactions directly through this program using the built-in mt4 bridge. So, if the brokerage risks in the moment increase, the dealing can overlap them in a moment through transaction with the help of MT4.
3. Realization of the opportunity to track the trading results and brokerage profitability directly in the context of different groups of financial assets. Thus, the dealer should view the result on the open positions both for the currency market assets (EURUSD, GBPUSD, ERGCAD, etc.), as well as cfd contracts (for example, stock market or cryptocurrency assets).
4. Dealing should be able to track the trading operations based on certain criteria and turn them into an automatic format. Thus, in the bridge with dealing there is a “templates” tab, which actually allows you to configure work with certain client groups and create the necessary conditions for their tracking. For example, you can create a template that will analyze the way a deal is opened, the retain period and the amount of the transactions. Thus, all the scalping transactions will fall into this group. This makes it possible to create flexible sets of rules and filters to find the necessary clients and build a logical chain of actions.
5. Bridge must redirect execution of transactions from the b-book to a-book methodology, as well as to set the required commission size or place in a certain group of clients. This allows you to offer individual trading conditions and, first of all, and to control the brokerage risks.
Undoubtedly, there should be software at the disposal of the dealer, which connects the clearing and the broker’s server, as well as all the necessary software package for direct communication with the client. However, I believe that using the liquidity bridge with the functionality I described above replaces the use of ten simple programs. After all, in fact the bridge is a full-fledged database for dealing, where you can not only track the results, but also respond to them. Today, there are quite a few companies in the market that develop software solutions for brokers. But not everyone combines the full complex described by me.>