Innovations for traders’ sake

Why all the fuss and bother about innovations in the forex industry? What innovations really matter now and can change the whole course of the market development? After decades of dramatic growth and maturing, foreign exchange trading has reached a new era.

The start of the new millennium witnessed rapid technological development and with it the inflow of private investments into the international forex market. But by the time private traders entered forex, it was framed mainly for the convenience of its constant participants – institutionals. New needs and specifics appeared demanding significant changes both in technological solutions and in brokers’ policies. It also gave an opportunity to many new companies to rise. Those who understood the new reality and met new requirements flourished.

FXOpen is one of the most vivid success stories of the period. It started – unusually – not on the basis of commercial incentives as do the majority of forex companies, but grew from the bottom up. FXOpen was set up as an educational centre of technical analysis without any thought of brokerage services in mind. Its founders – professional traders, witnessed an increasing inflow of private inexperienced investors losing their money in vain without proper market knowledge. Their new courses provided objective data about forex trading, helping to understand the market trends, avoid unnecessary risks and make thereforex trading more profitable. It enjoyed a great popularity. But though forex kept on attracting more and more common people, brokers still followed the usual customary route. Very quickly FXOpen’s founders realised that there was an overwhelming demand for a fair and transparent brokerage with a superior customer service in the market. This cause opened the way to FXOpen brokerage services in 2005.

It’s well known, that any company, and especially a start-up, succeeds only if it has something new, conspicuous and sought-after, to distinguish it from competitors and ensure its place on the market. Besides the technical analysis courses and trader-oriented conditions FXOpen made several important introductions to the industry that further opened up the market to public and adjusted it for convenient use of new participants. In 2006 it was the first one to realise that what traders really needed were Micro accounts allowing to minimise risks and learn more to insure better results before investing large sums of money. Moreover, 2006 witnessed the opening of forex trading to the Islamic audience, also conducted by FXOpen – it was again the first to offer a special type of Shari’a compliant accounts. It was only the start of the company’s improvements to spread the benefits of forex trading to the globalised world and make trading more convenient for the overwhelming number of traders.

A real revolution that was groundbreaking for the industry was the development and introduction of the first-ever MT4 ECN bridge that provided retail traders with an access to the ECN market via the MetaTrader platform for the first time in history.  It needs some explanation of the market peculiarities to appreciate the value of the innovation.

From the very beginning Retail Forex brokers in general were always divided in two: Dealing Desk (DD) brokers (market makers) and Non-Dealing Desk (NDD) brokers. The majority of brokers represent the so-called Dealing Desk model. In this case almost none of the orders executed through such brokers ever reach the actual market but rather stay in those brokers’ inner liquidity pool. Brokers may significantly influence spreads and quotes. DD broker means that specific broker employs dealers who either accept or reject orders from retail traders (re-quotes) depending if the broker is interested in accepting that order or not. The other type, Non-Dealing Desk broker, doesn’t interfere in the dealing process providing his clients direct access to the interbank Forex market through ECN (Electronic Communication Network) technology. ECN means direct access to the marketplace where you can trade with other traders and your orders are actually displayed in the market and are seen by others, who in turn can introduce their own orders and if the prices match, a deal is complete. But first this kind of brokerage, access to ECN was the privilege of institutional clients with large sums and huge trading turnover. Common retail traders had little chance to enjoy these model benefits. Private, unprofessional investors preferred to use easily comprehensible and user-friendly platforms allowing them to trade with comfort and any time. The majority preferred MetaTrader. As for 2009, for example, more than 60 percent of all brokers offer this platform and more than 90 percent of the total retail forex volume is executed through it. Unfortunately MT4 wasn’t designed to be used by NDD Brokers and to trade in ECN environment. There were several attempts at creating a bridge from MT4 to the interbank market but they provided an STP rather than ECN environment at best.

FXOpen has worked on the basis of MT4 from the start and saw how desirable was its bridge to ECN. The Company always placed a high value on development of advanced technologies to meet new, constantly appearing needs of traders. It formed a special IT department improving existing technologies and developing new ones to release to the market and make trading fairer and more convenient. Since MT4 was the world’s most wide-spread trading platform, it was decided to keep what was the best and most comfortable for traders’ activity in it. On its basis FXOpen team started to look for and eventually developed a solution settling the interest conflicts between Brokers and Traders, granting golden opportunities of ECN environment to retail traders. In 2009, the first ever MT4 ECN trading platform was introduced to the market, opening for the first time in history the fair, transparent, high-liquidity interbank market to common investors. It gave FXOpen’s customers the main benefit of making money without any interference of the third party in the process of trading. It was a revolution in the industry skyrocketing the company’s ranking and the number of its clients. But FXOpen didn’t simply rest on its laurels. The company chose the right track.

Shortly right after MT4-ECN introduction FXOpen added PAMM (Percentage Allocation Management Module) accounts. It was a rare feature at the time, not speaking of PAMM accounts in ECN environment. Briefly speaking, its numerous advantages are as follows. On the one hand, it allows unprofessional traders to choose the best professional manager for their funds, enjoy the profits of his/her work and still keep control of your money.

On the other hand, it allows experienced traders to manage trusted to them funds, without being distracted by a lot of technicalities. PAMM-service automatically distributes profits and losses between the manager and each individual investor. This arrangement ensures that the manager and his or her investors who deposited into his or her account will get their share of profits on time and accurately in accordance with the terms of the offer (contract) between them. Public monitoring system will immediately show who the best manager is, and makes it easy to attract the necessary investors.

FXOpen didn’t stop at that either and added 0.1 minimum lot on ECN. It completed the ECN technological revolution in the MT4 FOREX trading environment, but not FXOpen’s innovations. Now it’s introducing the first ever traders’ CRM to bring Broker-Trader interaction to a new level and has much more pioneering solutions to come. This policy of constant trader-oriented innovations made FXOpen the driver of the industry’s development and ensured its place in the top leading FOREX brokerage companies in the world.

Today, FXOpen is one of the largest forex brokers in the world with more than 217,000 active accounts (Micro, Standard and ECN) and over $65 bn in traded volume passing through its platforms on a monthly basis. It provides its clients with everything necessary to get the most and the best from forex trading: advanced trading technology, reliable order execution and dedicated support in more than 10 languages. It offers the most convenient conditions – lowest spreads (from 0.1 pips on EUR/USD) and minimum deposits (from only $1), free unlimited demo account and various deposit/withdrawal options. Regular technical research and market news, promotions and experienced help is common practice allowing traders to focus on their profit-making with ease and comfort. All that could not but place FXOpen at the top of leading forex companies of the world.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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