For our latest industry interview, we spoke with Cristian Vlasceanu, CEO at Centroid Solutions. He shared his thoughts on the main issues that forex brokers are facing, and the trading technology that they are using to offer a better, faster trading experience to their growing customer base.
Low Latency Trading With Centroid Solutions
Tell us a little about Centroid Solutions.
Centroid Solutions is a fintech innovator specializing in risk management, quantitative analytics, bridging and connectivity, complex execution strategies and P&L optimization for multi-asset financial brokers. Centroid offers a complete suite of technology solutions and infrastructure that is specifically designed to help brokers optimize their business operations and performance, expand their product offering and facilitate business growth.
What do you think are the main challenges forex brokers are facing at the moment?
There are in fact quite a few challenges that brokers are facing at the moment. Over the last couple of years, volatility and market conditions have been more extreme, leading to increased client engagements, and higher trading volumes. Brokers are dealing with increased demand and with global customer bases (clients based all over the world want to trade and take advance of the higher volatility). This creates challenges as some of the traders will be geographically far away from the trading infrastructure, and in locations where connectivity can be challenging. Brokers therefore must come up with the best solutions to cater to their global customer base, to provide an adequate, low latency and stable trading experience throughout.
Also, as the volatility is greater the prices tend to move faster which can lead to slippage on execution in these market conditions, especially if the trading infrastructure is not optimally designed. Another challenge is that brokers are facing increased demand for different asset classes so they must enhance their offering in order to stay relevant to their customers. The multi-asset offering is a challenge to setup and manage for brokers and requires adequate technology that has the capabilities and the connectivity solutions to support this.
What technology do you think brokers need to invest in to help overcome these challenges?
The best practice to create the optimal trading experience for a global customer base of a multi-asset broker is to have the main trading infrastructure as close as possible to the source of liquidity and make use of a low-latency, highly scalable and with high throughput technology that can handle even the most stringent market volatility conditions, in order to provide accurate and up to date price updates to the trading platforms, as well as handle trade execution without delay, thus minimizing execution times, slippage, and providing the best opportunities for the traders.
Additionally, in order to ensure a smooth, stable experience for all the customers that may be spread around the world, connectivity from these various regions to the trading platform is key; instead of relying on the Internet to handle the connectivity from each customer to the trading platform it is much better to have access / proxy servers located close to the customers, in their geographical location, and then control and optimize the connections from these proxies to the trading environment.
How can Centroid Solutions help brokers looking to overcome these challenges and improve their setups. Can you tell us more about your services?
We can help brokers achieve an optimal trading environment through our solutions and infrastructure. Namely, we have developed the Centroid Gateways Aggregation Engine – an institutional-grade connectivity, execution, and reporting system, backed by highly redundant low latency infrastructure in Equinix LD4, NY4 and TY3, with backup facilities and enterprise-level DDoS protection to ensure consistent, secured and reliable operations. The system connects to any number of LPs of choice, has capabilities to connect to exchanges, facilitating support for a multi-asset offering for brokers, by managing pricing, liquidity and execution from one centralized environment. Furthermore, any platform or API can be connected to the engine, such as MT4, MT5, cTrader, FIX API clients and other trading platforms, allowing brokers to easily control a multi-platform setup.
Additionally, in accordance with the best practices mentioned above, we can also provide our customers with dedicated hosting solutions provisioned in the same world’s leading datacentres, specifically tailored for their trading platforms. This ensures optimal operation with up-to-date market prices and low latency towards execution engines and liquidity sources, as well as optimized connectivity between access points and trading servers, for high quality client services around the globe. An enterprise level DDoS protection system safeguards against attacks of any scale.
Why is having low latency trading important for traders right now?
Low latency trading has always been important for traders and in the recent times it has become of critical importance. As more participants are being attracted to trading due to the opportunities created by the increased volatility across various asset classes, having a low latency when entering and especially exiting positions makes a huge difference. Many trading strategies rely on the ability to react fast to market events and movements and that can only be achieved on a low latency trading environment. Traders that have fast market access maintain a huge advantage over others, which can usually make the difference between a large profit or loss. Experienced traders will always put a huge emphasis on the speed of execution and will actively compare brokers and seek out those with consistently fast and reliable trading setups.
Why is offering low latency trading a priority for brokers right now?
To keep customers happy, win market share and increase revenues. There is currently a fierce competition between brokers, and traders have a lot of options to choose from, for their trading activities. Established brokers know that in order to be successful it is extremely important to offer the best trading conditions possible, across a large number of assets, in order to maintain and grow a loyal customer base. Like this the number of customers will increase over time, leading to consistent and increasing processed volumes and revenues. To achieve this, it is of primal importance to have the right trading setups, offering and infrastructure.
In your opinion, what more can brokers do to improve their clients’ connectivity?
Brokers need to constantly monitor and improve connectivity for their growing global customer bases, by trying to control the connectivity as much as possible, end to end, between their customers and their trading venues. Therefore, firstly, it is important to follow the best practices for their main trading infrastructure, as mentioned above. That is what we specialize in and thus they can rely on our services. Additionally, for customers located geographically far from their trading infrastructure, it is important to monitor and optimize the connections of their customers to the trading servers, by using a specialized provider such as yourselves,
MT Proxy. As the customer bases are more and more dynamic, it is not enough to just configure connectivity setups once, it is important to keep monitoring and adjust continuously.
Lastly, how are your solutions deployed and how can brokers contact you to find out more about your offering?
All our solutions are delivered bespoke and tailored to individual needs of each of our clients, so we first start by understanding the requirements of the customer, followed by an in-depth walkthrough of our relevant solutions. Finally, our development and on-boarding teams will take over to build and deploy the products meeting the customer’s needs and provide assistance and training throughout the on-boarding process and on-going afterwards. We can be reached via the usual channels, such as our website (www.centroidsol.com) or via email to [email protected].
About Centroid Solutions
Centroid Solutions is a technology company that specializes in risk management, quantitative analytics, bridging, connectivity, complex execution strategies, and P&L optimization. Their technology solutions are designed to help brokers optimize their business performance and facilitate business growth. For more information, contact Centroid Solutions.
About MT Proxy
MT Proxy provides custom-built proxy server networks. These networks enable brokers to boost connectivity, reduce excess latency, and offer a better, faster online trading experience to clients worldwide. They also enable brokers to better protect their businesses against DDoS attacks and latency arbitrage. For more information, sign up for our free trial.