MT4 Liquidity Bridge is an essential MT4 API that ensures the traders are able to access the best liquidity for the trading into their favorite forex pairs, indices, energy instruments, etc.
So if you are an MT4 Broker and want to run an A Book brokerage, you must look for an efficient MT4 Liquidity Bridge that will connect you with the best forex liquidity providers.
Liquidity is the lifeblood of a flourishing forex trading platform.
It ensures traders get access to the best live price quotes for their favorite trading instruments and their orders are executed at the fastest speed and lowest spreads.
What is an MT4 Liquidity Bridge?
MT4 Liquidity Bridge is one of Forex trading software that connects an MT4 Trading Terminal to one or many liquidity providers and establishes a seamless two-way communication network to send and receive price quotes, trade orders, order fill information, etc.
Why MT4 Liquidity Bridge?
MT4 Trading Platforms revolutionize the online spot forex trading market. It has great features and functionalities that a B Book broker would need. It was developed for spot forex brokers only who would act as market makers themselves.
The B Book brokers earned a bad name for brokers among the forex trading community for their shady business practices especially around the order fill at the worst price, trade manipulation, shutting business without giving withdrawals, etc.
This shook the confidence of forex traders in online trading.
But as the forex trading market grew, there grew the demand for third-party forex liquidity solutions which were independent, transparent, and not in sole control of forex brokers.
MetaTrader did not have this feature so many forex software development companies started working on it and launched their MT4 Liquidity Bridge.
This worked wonders and established the confidence of forex traders into forex brokers.
How does an MT4 Liquidity Bridge Work?
An efficient liquidity bridge tool helps forex brokers to establish and maintain secure & seamless connections with different forex liquidity providers simultaneously.
It ensures dynamic routing between trading terminals & pools of liquidity at low latency rates.
- MT4 Bridge is connected with an MT4 Server with the login credentials
- MT4 Broker needs to define whether trades of all the clients or selected traders to be executed through the Liquidity Bridge.
- Create a Group in MT4 Manager and assign it to all the traders whose trades to be executed via MT4 Bridge.
- Once the connection is established, traders will be able to see the live price quotes with bids and asks and level 2 depths as well.
- As soon as an order is placed, it is sent to the connected liquidity pool via the MT4 Bridge. Order is matched with the best counterparty and a confirmation of the same is sent back to the trader.
- The spreads are tight, depth is accessible and orders are executed almost instantly due to low latency.
Features & Benefits of an MT4 Liquidity Bridge
I. Organic Liquidity
Traders can trade with other traders like them.
II. Tight Spreads
The traders get access to large forex liquidity pools with tight spreads. The difference between the best bid and ask prices are in the truest raw form coming from an open wholesale market. Every better price changes the spread instantly and is visible to everyone.
III. Orders Visibility
All open and unfilled trade orders are displayed openly and seen by others on the market.
IV. Very Low Latency
Traders’ orders are executed within a fraction of seconds and sometimes in Nano-second.
V. Partial Order Execution
Since MT4 Bridge gives you access to the real organic forex market, there is a possibility of partial order execution. If there is a counterparty that is ready to take the opposite side of trade but the quantity is low, the order will be matched and filled for the available quantity.
The rest of the order will be still available in the market for execution.
VI. Market Depth
Traders that place Market Orders always worry what if the next available order for matching is at a far different level. Access to Market depth allows them to plan their trades properly without being uncertain about the risk.
MT4 Liquidity Bridge Cost
MT4 Liquidity Bridge Cost is not fixed and different MT4 Liquidity Bridge Providers price their solution differently.
4 key components of MT4 Liquidity Bridge Cost
1. MT4 Liquidity Bridge Set Up Fee
An MT4 Liquidity Bridge provider may charge a one-time setup fee for their solution.
MT4 Liquidity Bridge one time Set Up Fee could be as low as USD 499 and can go up to USD 2000 depending on the bridge functions and the provider.
2. MT4 Liquidity Bridge Subscription Cost
Some MT4 Liquidity Bridge providers may choose to charge a fixed monthly subscription fee for their solution.
Flat MT4 Liquidity Bridge Subscription Cost could be as lows as USD 2000 per month.
One-time setup fee and monthly subscription charges for the MT4 Bridge is optional and some providers choose to not charge them as they make money from the following methods.
3. Volume Based Brokerages
MT4 Bridge providers do need to make money and they may levy volume-based charges to make money. How much they charge largely depends solely on the kind of trading volume a broker commits them to deliver in a specified duration which in most cases is monthly.
4. Spread mark ups on price received though the MT4 Bridge
Some MT4 Bridge providers may want to add their mark-up on raw spreads coming through the MT4 bridge. This kills the original idea of getting the tight spreads with an MT4 Bridge but it still may work if these spreads are very low.
MT4 Liquidity Bridge Providers
There are several forex brokerage solution providers that have developed their own MT4 Bridge Solution.
5 Best MT4 Liquidity Bridge Providers
- Brokeree offers a state of the art MT4 Bridge Liquidity called BridgeCore
- Meta Trader offers an MT4 Bridge that comes with different hedging and risk management algorithms. And the best thing about them is that they have a simple flat fee for their Liquidity Bridge.
- Tools for Brokers offer their Liquidity Bridge with an Intuitive web interface, Backup Liquidity Provider to guarantee seamless trade execution, Smart routing system, Six different aggregation modes etc.
- Prixim UK offers an ultra-low latent Forex liquidity bridge that uses APIs.
- Fortex’s MT4 Bridge OMX give Access Tier 1 Liquidity Directly
Final Words with little caution!
If you are an MT4 Broker are looking to operate your business as an A Book Broker, MT4 Liquidity Bridge should be your go-to solution.
But before you start, you must do some homework;
- How many clients would want to trade in relatively larger volumes
- What gross volume you will be able to generate on monthly basis
- If you were running a B Book brokerage, you might not have been charging brokerages, swap charges etc. as you are making money when your clients would lose. But when you move to A Book method, you need to levy brokerage charges, swap etc. to make money.
- Will your clients be comfortable with that? No one likes their charges going up.
- Check with your prospective MT4 Bridge Provider the terms and conditions along with charges. Get crystal clear with all the charges.
- Run and estimates projections of revenue for next couple of quarters with costing and see what will it take you to get break even and then profitable.
- Be little conservative and try to give yourself breathing space with numbers.
- Go for it if it makes sense or else try to see how you can make adjustments to make it work.
Hope we were able to educate you about the different aspects of the MT4 Liquidity Bridge.
Please do contact us for any other queries.
Wish you success.