The social trading aspects from brokerage platforms and 3rd party vendor solutions continue to gain momentum with the latest announcement coming from Armada Markets. The Estonian headquartered Forex ECN broker has partnered with Myfxbook for its AutoTrade copy trading platform in order to cater to the Armada Markets' mostly algorithmic trading customer base.
Forex Magnates spoke with Armada Markets CEO, Ingmar Mattus, directly regarding the news and he said, “Armada is a top choice among algorithmic traders who are convinced that manual trading is a thing of the past. We are always happy to add services and products that help our clients succeed in trading, which in my experience is one of the toughest jobs in the world. All four partners of Armada have a long-term trading experience, and we are building the company based on what we would expect from a broker if we would still be trading actively.”
Some of the drivers behind the firm's choice of Myfxbook included:
- Signal providers are paid only for profitable trades.
- Only real money accounts with proven track record can become signal providers.
- Demo accounts are excluded from the system.
- Real and accurate trade statistics is shown to reduce risk.
- Cost of the service is clearly stated when users open a live account.
Ultra-low Spreads Driving Trading Robot Usage
Ingmar Mattus, CEO Armada Markets
Mr. Mattus also explained that the company’s competitive pricing and commission model, which they aim to be around the top among retail brokers, has allowed Armada to appeal to algorithmic traders. The firm's customer base is algorithmically oriented, with less than 10% trading manually, and the company lists the expert advisors who its clients use, as well as the top ten systems on the corporate website.
The ultra low spread and commission rates appear to be the attractor of the trading robots, which often require such raw pricing to function at high frequency without accruing significant brokerage costs at the expense of profits (as when compared to higher spreads or commission fees). That is, the cost of trading becomes even more pronounced as trade size and frequency increase, hence the appeal towards algorithmic traders, whose system may otherwise not capture enough alpha to have a positive profit factor or expected payoff.
In terms of total activity, as told to Forex Magnates Research, the broker totaled $8.3 bln in volume during September 2013.
In the corporate statement, Alex Rekun, Myfxbook CEO, said, “following our user requests, we're delighted to add Armada Markets to our AutoTrade offering. The ECN broker will be a perfect match with our AutoTrade technology."
Armada Markets Estonia Office
Armada Markets is regulated in Estonia as a registered spot foreign exchange and metals broker by the Ministry of Economic Affairs, and is a preferred introducing broker with LMAX in London for products that are not covered under local regulation. Plans are also in the works for the firm to launch a new regulatory jurisdiction, as well as new innovative platform offerings in the near term, although the three firm could not comment yet on specifics.
Technology Partners and Liquidity Providers
The back office and middle office solutions are via PrimeXM which has provided a white label solution of the MT4 platform with the connected bridge to the back-end system, and co-located hosting at major data-centers such as Equinix. Armada Markets has already purchased a full MT4 license which it plans on implementing with the consultancy and guidance of Prime FX as an advisor, and planning to co-locate as to parallel their existing setup under their own MT4 full license. Armada has achieved sub 200 ms execution speeds, as told to Forex Magnates, with its current configuration. Myfxbook followed today with the announcement on its blog of a new broker - the Panama based IamFx Inc. - to its list of compatible provider for the AutoTrade platform.
