What is the advantage of the machine over a man? It has infinite possibilities of collecting and analyzing data, but above all, it’s devoid of emotions making trading more effective. Previously, large IT departments were being created to develop algorithms that’ll do all the trading instead of humans. This so-called algo trading is an approach based on strictly defined rules with no space for acting on a hunch.
What is algo trading?
To simplify, algo trading is a process of using program (algorithm) to define and follow a set of instructions for placing trades to generate profits at a frequency, which is impossible to maintain by a person. It’s getting more and more popular because of its speed and the possibility to mitigate human emotions that often affect the performance. Until now, using AI in trading was limited to an exclusive group of hedge funds draining the market of the Ivy League IT specialists. Recently also brokerage firms started using algo trading platforms but it’s still quite expensive and requires large minimums from anyone who wants to trade.
Using technology – whether it’s AI or not – to optimize trading strategies is all about identifying patterns and analyzing them to predict how/when the market changes. Sounds easy but it’s not. The market itself is very volatile and the analysis requires gathering a vast amount of data from diverse sources. There are platforms emerging that provide crowdsourced data from mobile apps and social media or market data such as historical price data, trading volumes, capitalization, best trading strategies etc. Giving that, it’s becoming more and more accessible to deploy your own algo trading strategies. But still, is developing the most extensive strategy, using the best EA robots enough to succeed? What about time, those micro latencies counted in microseconds, that are the most important part of your orders’ execution? Even the best strategy can turn ineffective without immediate execution.
The principles of effective trading
What are the elements of effective trading? Well, advanced trading strategy for sure but what you still need is a reliable matching engine with no last look execution and ultra-fast data feeds. To keep up with the changing industry, it has become essential for brokers and institutional clients to speed up execution using cutting edge technology. No last look means that when a request to trade against the quoted price is received, the liquidity provider (LP) won’t hold the request and will fill the trade at the price quoted eliminating unnecessary delay. Yet, what if the time of execution could be shortened even more giving a trader those few microseconds of advantage? Even such little thing as reducing the distance to speed up the communication between the matching engine and the MetaTrader platform matters if you want to increase the likelihood of your broker’s success. If you are serious about becoming a broker and want to make money on your business, you need a trusted partner who will understand the rules of trading and deliver high-end, proven technologies.
Matching engine with no last look execution
Match-Trade’s matching engine not only offers no last look execution but is also installed right next to our MT4 platform in the efficient and very stable OVH data center that meets the highest safety standards. With our partner’s LP FX Edge servers set beside, this combo offers the shortest possible time of execution. What makes Mach-Trade’s matching engine unique on the market is the fact that in the order book the customer not only sees the price set by the broker but his trade is also matched with the other clients’ orders. And such procedure, by default, leaves no place for the last look.
However, even the best tools will not be successful unless they are cost-effective. Here, at Match-Trade we understand the principles of sustainable business that’s why we offer comprehensive solutions to start your own brokerage at a reasonable price and support their implementation and configuration. We also cooperate with the FX-Edge liquidity provider to ensure our client get access to the deep liquidity while maintaining small spreads and the free connectivity via MT4/MT5 Bridge.
Match-Trade’s system offers no last look execution and fix API connector which allows seamless integration with Match-Trade Client Office for MT4, MT5 or every other third-party platform providers. Furthermore, we have a wide range of broker’s software and our experts provide complete integration including emulating any API used by the broker. This makes adoption of our solutions swifter and guarantees that all the transactions are processed without unnecessary delays.
To learn more about possible cost optimization for your brokerage business please read this article or let us know what are your monthly costs so we can estimate your possible savings.