When considering the merits of an FX platform and retail brokerage services, the issue of latency can too often be overlooked amidst attention on low and fixed spreads, zero commissions and interface features. Understanding latency however can be critical to the success or failure of a trading strategy, and is becoming a main issue of concern for traders when determining their best broker. Even with ever increasing internet connection speeds, round trip data latency can reach several seconds. For certain trading strategies, these few seconds can make the difference between a profitable and a losing trade – and this is especially true for algorithmic and high frequency traders and scalping strategies.
cTrader is co-located with all major ECNs, liquidity providers and prime brokers, delivering ultra-low, sub-millisecond latency to brokers by offering a fully-hosted PaaS (Platform as a Service) solution, without the need for expensive hosting, development, licensing, network infrastructure or additional staff costs. Our easily-integrated solution can be adopted into any current broker setup, slashing latency to sub-millisecond times and improving other aspects of trading and brokerage services, such as transparency, risk management, liquidity distribution and accurate price execution.
With the implementation of this agency mode, all that is required from the broker’s side is to manage and customize the service they want to offer from the backend using cBroker, our backend solution which allows for the management of every aspect of their product offering: markups, flexible commission structures and ticket sizes. And perhaps most importantly, brokers have behind them a dedicated and highly qualified team offering support and service at all times.
Bridging the ECN market gap
There exists a cavernous gap in the ECN market, with currently available solutions too often involved with taking a platform that was not designed to function as an ECN and adding numerous bolts and screws in order to provide a barely up to standard ECN alternative. The market is demanding a long overdue, genuine ECN solution, and we are filling this demand with products which create additional value for our partners.It’s obvious that brokers today are facing mostly the same complications they have been facing for over ten years; those of latency, connectivity, platform speed, reliability and security.
We have replaced all the old concerns of failed entries and exits, unfilled stops, negative slippage, etc. and we’ve introduced a robust trading package with lightning-fast order execution previously only available through institutional networks. What we offer to brokers is the ability to constrain platform and execution speed to the capacity of the trader’s internet connection. Sub-millisecond latency, flawless connectivity with FIX Protocol, delivered securely though our proprietary proxy cloud to the advantage of both the trader and the broker.
The trend in forex is highly in favour of a move towards ECN agency model brokers – and these topics are dominating the conversation when it comes to traders choosing their service. Brokers are also recognizing that the opportunity exists to introduce to their clients a truly marketable proposition of the ECN agency model in an industry struggling to convince over issues of trust and transparency. The alignment of interests between brokers and traders which occurs under true ECN conditions makes for an attractive proposal to a more discerning type of trader, as well as traders already disaffected with the current broker-client dynamics.
ECN immediately paves the way for brokers to build a mutually beneficial client relationship model, and focus more resources on customer retention strategies, a far more beneficial model in the long run than the current average market maker acquisition and burn rate. Another major reason for the rush to ECN is the exposure brokers face from large volumes in volatile periods and from automated and high-frequency trading, which has exploded onto the retail forex industry.
These elements can offer brokers their more profitable periods, but also place the broker under a severe risk burden. The sheer volume and frequency of these trades mean that risk managers can no longer keep up. With ECN we not only reduce the risk, but often eliminate it completely.
For traders and brokers alike, our research and our work here over the last few years has shown us that ECN is the answer to many of the problems facing the Forex industry. cTrader aims to rollout our breakthrough solutions and foster a new, unusually satisfied Forex community.
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