A Liquidity Provider (LP) is an institution or financial entity that acts as a counterparty to another financial entity, such as a retail FX broker or hedge fund. A Liquidity Provider acts as a market maker, both buying and selling a given asset, creating a market to be able to trade against.

A liquidity provider acts as a counterparty to all the risk/exposure the financial entity faces, for example, from their end clients. Under certain jurisdictions, or with certain types of licence, the broker cannot carry any risk/exposure themselves and therefore operates by offsetting this risk to a Liquidity Provider.

In some situations, although the broker can carry their risk themselves, they may choose not to. For example, they may determine they are carrying too much risk and therefore choose to offset this risk to a Liquidity Provider.

A Liquidity Bridge is a low-latency piece of software that acts as an intermediary between a trading platform and a source of pricing/liquidity. It gives brokers full control to set up a direct connection from a trading platform, such as MetaTrader 4 or MetaTrader 5 to Liquidity Providers.

A Liquidity Bridge takes only a few milliseconds to process a client order, providing a fast and efficient automated “Straight Through Process” for the financial entity.

With a liquidity bridge, a broker can automatically cover all broker risks with LPs in real-time, easily managing A-Book and B-Book flow with ‘Cover Trades’ and create a variety of spread profiles with custom mark-up functionality.

The Financial Information Exchange (FIX) is an industry-standard messaging protocol that consists of a set of clearly defined rules of engagement. The FIX messaging protocol is compatible with a vast network of brokerages, trading platforms, and nearly all Liquidity Providers.

An Application Programming Interface (API) is a set of pre-defined rules that allows two software applications to communicate with each other.

APIs are used in all software applications to enable them to communicate with other applications, using standards. There are many types of APIs, offered in many types of programming languages (like Python, Java, C#, C, etc), and many standards, making API integration a very complex process.

The most common API used in the FX industry is the FIX (Financial Information Exchange) API. This API is a message-based protocol, and therefore can be used with any programming language and any application.

The Gold-i Liquidity Bridge for MetaTrader 4 (MT4) and MetaTrader 5 (MT5) and Gold-i Matrix make use of the FIX API protocol and various platform APIs to connect Financial Entities with Liquidity Providers. The FIX API is very fast and allows very low-latency connections between all parties.

Slippage refers to the difference between the expected price of a trade and the price at which the trade is executed. It can happen at any time but is most common during periods of higher volatility. Slippage can also occur, due to low available liquidity, when a large order is executed but there isn't enough volume at the chosen price to execute the trade at the requested bid/ask spread.

MT4: 

500 Symbols, 25 Client Groups, 1 Security Group, 5 Managers, Unlimited Accounts, 1 Gold-i MT4 Bridge to single LP, Technical Set-up & Support, Client Terminal (Desktop), Client Mobile Application, Client Web Terminal, MT4 Manager (Dealing)

MT5: 

100 Symbols, 25 Client Groups, 5 Managers, 500  Accounts, 1 Gold-i MT5 Gateway to single LP, Technical Set-up & Support, Client Terminal (Desktop), Client Mobile Application, Client Web Terminal, MT5 Manager (Dealing)

MT5 is architecturally a better platform. It is scalable and has no hard limits. It is an all-in-one multi-asset trading platform that offers superior tools for comprehensive price analysis, algorithmic trading applications, and copy trading. MetaTrader 5 allows traders to get more instruments and functional features; therefore, such a platform is more professional.

Traders are also very comfortable with using MT4. It is stable, it is available, and it works. As MT4 is also already installed on millions of computers globally, some brokers see it as complex to switch from MT4 to MT5, but it can come with a wealth of long-term benefits.

MT4 and MT5 use different programming languages (MQL4 & MQL5 language). MetaTrader 5 is marked by object-focused logic and a well-developed testing system for checking the efficiency of advisers. Nevertheless, the MT5 interface is close to the MT4. The new version obtained the market depth to monitor up-to-date quotes and transaction volumes.

It is important to note that MetaQuotes no longer allows new brokers to offer MT4 and has entirely removed it from the marketplace. MetaQuotes still provide support to existing MT4 customers, but the monthly fee is more expensive. However, if MT4 is still your preference, Gold-i provides a white-label option.

A-Book means a trade is passed through to the market and filled by a liquidity provider, who act as intermediaries and generate profit from spreads, commissions and markups. In comparison, when trading on the B-book model, brokers fill the trade, and the risk is internalised. Instead of passing the trade along to the LP, they’ll fill it from their balance sheet. To maximise profits and reduce risks, many brokers adopt a hybrid model.

Itexsys are an independent MetaTrader MT4 and MT5 White Label service, providing low latency execution in a secure and robust environment, backed by solid support and industry knowledge levels through their partnership with Gold-i. Itexsys’ clients have access to a wide range of Gold-i’s market-leading plugins, including multi-account managers and risk management tools.

Itexys is our trusted independent partner, who help FX and CFD brokers of all sizes to create and implement their own bespoke MT4 or MT5 offering. They have a wealth of experience and has the advantage of being completely agnostic, with no affiliation to any broker or LP.

Together, we have helped many regulated and unregulated brokers who require a low-cost entry to progress to the point of needing to have their own MT4 / MT5 license.

Set up time can vary depending on the stage of the brokerage business. If all necessary aspects are in place, the process can take only a few weeks to set up fully. 

Start-up brokers must make sure their company is registered. Running a business in regulated countries requires an expensive license, more funds, and every formality usually takes more time; therefore, many start with offshore jurisdictions. We see many starting brokers establish themselves within the offshore and then move to more regulated markets as their company and revenue grow.

Wherever you establish your business, make sure you have all information about the reporting you will need to provide to the regulator.

As a technology provider, we have no affiliation with any brokers or LP’s. You can be sure that we are unbiased and will give you the freedom to choose how to configure your brokerage.

That is not an issue. Gold-i can help you migrate all necessary data to our server and provide you with the setup. By switching, you will gain access to our award-winning and low latency bridge, in addition to other plugins and much more freedom regarding choosing a liquidity provider that suits your individual needs.