Providers of trading platforms in the complex world of derivatives markets are preparing for an interesting period in the once monopolised market. With the recent changes being rolled out by one particular vendor, MetaQuotes, the once un-competitive platform market is opening up as traders and developers look for new venues to share their ideas and expertise.
In an on-going quarrel with third party developers, and in an attempt to fight allegedly reoccurring hackings to its systems, Cyprus based MetaQuotes has been placing sanctions on firms that are collaborating with the vendor. And so, 3rd party developers have been creating interesting add-ons and plugins to complement platforms offered by MetaQuotes such as MetaTrader 4. The new restrictions mean that firms that have used technology to enhance the MetaTrader 4 platform are now in a state of limbo. In a recent round of withdrawals, MetaQuotes targeted firms that offer social trading solutions including; Zulu Trade, Tradency and Myfxbook.
Watch Out - Now
In a statement on MetaQuote’s support site, the vendor warned firms using the social trading providers:
Unfortunately, some third-party developers have hacked MetaTrader 4 Trading Platform ’s network protocols violating end user license agreements and terms of contracts with brokerage companies. As a part of our active efforts to improve MetaTrader 4 system, we are starting to upgrade the network protocols and block all services based on the hacked versions. We urge you to cease any cooperation with ZuluTrade, Tradency, Tradeo, Myfxbook and other companies that use the hacked protocols violating our rights.
The world of online trading is constantly evolving from the early days of electronic trading, pre-millennium (2000) was the first phase when retail platforms were being launched where traders were lucky to have functionality that supported point and click trading only, let alone 1-click trading or advanced charting. Technology has been the ultimate driving force behind the growth in the FX markets as investors across the globe can easily access the $4 trillion a day market through electronic means. In the present time, platforms have evolved to be available on web and mobile, support algorithmic & automated trading and allow traders to use social techniques to share and understand trading strategies.
Since 2005, FX has been growing in both developed and emerging markets, novice traders were being introduced to the emphatic MT4 platform, thus creating a new generation of MT4 savvy traders. Brokers have also embraced FX via the MT4 route as a simple and cost effective platform that can easily be implemented and is ready to go.
And The Winner Is...
Competition in the platform space has been a non-existent phenomenon as MT4 was standing in first place for a considerable period. Has the time come for it to step down, or is the market going to force resignation?
“Domination of the single platform is definitely at its end. This may come from the increasing risk, as evidenced in the recklessness of the last few weeks, or the increasing appreciation of open and fair platforms like cTrader, where we've seen our client base grow tremendously,” commented Ilya Holeu, Head of Sales and Marketing at Spotware Systems to Forex Magnates.
Mr Holeu adds: “More and more brokers are looking to diversify their technological risks on a single platform. We also recognize that the driving force behind the retail market has become a lot more sophisticated, and traders are now on the lookout for better and fairer technology that is not burdened by the negative aura that has surrounded the single platform.”
Platform vendors who struggled to get their platforms to gain traction among traders will view the recent changes as a critical opportunity, Raymond Deux, Founder and CEO of NinjaTrader a platform provider for the futures market feels there is room for him to enter the mega FX markets, he said in a statement to Forex Magnates: “When a single entity commands such dominance over a market it is inevitable that they will end up giving away market share. The FX space has always been very intriguing to me and is a natural path for me to grow our business. I feel that over the next five years, NinjaTrader will become very popular platform for FX traders.”
However with the market volatility expanding across different asset classes including commodities like Gold and Oil, traders have been keen to diverse their portfolio and have a ‘one stop shop’ sort of platform. Roman Nalivayko, Head of marketing and sales at PFSOFT, a multi asset provider from Ukraine feels that the market was already gearing towards a significant change, he says: “In our point of view the market is already moving in this direction and recent activities of the MetaQuotes company are only stimulating it: previous focus on one platform is shifting to other vendors. Also we saw this tendency in iFXExpo last week and in Integral FX survey.”
The social trading platforms have already given their response to the MetaQuotes changes and as mentioned by the platform providers, PFSOFT, NinjaTrader & Spotware Systems, whom we spoke to; the changes could be for the greater good of the industry and create a new buzz among platform vendors who can showcase their fancy functionality. The difficulty brokers and vendors will face is the re-education process which will be both costly and time-consuming, we are in a period of the MT4 boomers!
We feel that change is paramount in a technology driven market where firms have a short window to highlight their products. Traders have changed their behaviour during the last 15 years migrating from voice to electronic trading; it’s now time for us all to embrace the on-going changes.
