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Thursday, December 1, 2022

Metatrader 5: main advantages and differences for brokers

The basic functionality of the metatrader5 platform does not support many options with which the broker could manage risks and automate work with clients.

Software from specialized companies is designed to fill these gaps and make the work of brokers as efficient as possible.

Metatrader also has special plugins that can be used to increase the platform’s capabilities, thereby increasing the efficiency of the broker.

Overview of the main types of MT5 instruments

MT5 instruments can be conditionally divided into several types:

  • ability to manage liquidity;
  • processes for engaging potential customers;
  • the ability to avoid negative consequences.

Each deserves a more detailed definition.

Liquidity. What’s important?

The MT5 bridge plugin connects the metatrader terminal with liquidity providers. In the process of aggregation, the quotes flow comes from the liquidity provider (LP) to the client’s terminal, and the clients’ orders are transferred directly to the LP.

When working according to the B-book model, a broker acts as a liquidity provider. Transactions can be redirected between A-book and B-book without restarting the server.

Management of risks

Risk management is the backbone of every broker’s profitable strategy. Metatrader tools allow maximum flexibility in controlling the company’s risk management.

There are several risk management tools. Here we should stop in more detail.

Leverage – increases margin management opportunities depending on changes in market conditions.

Stop out plugins – automatically closes positions when equity or balance drops to a critical level.

Working with spread – allows you to change the size of the spread when it matters, for example during the night session. Dealers – automate the execution of customer transactions in the B-book model.

In turn, swap management – allows you to adjust the size of the swap. And the use of these tools helps the broker to strengthen its competitive advantages and increase the amount of funds raised.

There are certain solutions to attract customers. For example, bonus plugins are a variety of solutions for organizing promotions and campaigns related to bonuses.

Money management solutions – allow beginners to transfer control of their trades and funds to experienced traders.

The use of tools that complement the metatrader gives a reliable broker such as AvaTrade undeniable advantages:

  • the ability to set up flexible trading conditions for different groups;
  • reducing the risk of accidental losses due to volatility jumps;
  • due to the conclusion of clients’ transactions on the interbank market, there is no conflict of interest;
  • customer loyalty and an increase in the average deposit size;
  • risk control and liquidity management favours the growth of the company’s profitability.

Acquisition-oriented tools strengthen the image and help to take a winning position in relation to competitors.

Differences in the choice of tools

When selecting tools, it will be useful to analyse the company’s development strategy. Firstly, these are markets of presence.

Risk management is a basic element that directly affects profits. Complementing the functionality of a metatrader, the broker invests in the most valuable thing – customer loyalty and company growth prospects.

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