In recent articles, I’ve looked at the benefits of low latency trading for all forex brokers. This week, I’d like us to take a closer look at why low latency trading is particularly important for brokers that offer trading on the MT5 trading platform.
Low Latency Trading On MetaTrader5
As you may already know, MT5 was first launched back in 2010. While it has always been popular, MT5 has only recently become the market-leading trading platform. Over the last twelve months, it has been the go-to product for many companies, with major forex brokers like TickMill also launching the platform. It has also been the go-to product at award ceremonies, and has won two industry accolades in the last six months alone.
According to MetaQuotes, there has been a measurable increase in demand. In a recent press release, it said that utilization of the MT5 trading servers has increased significantly. A recent study by MetaQuotes also showed that the percent utilization of MT5 has increased to 63.3%, and that utilization of MT4 servers has dropped to 36.7%. This suggests an industry-wide shift from MT4 to MT5, with MT5 now being the preferred product.
Why the sudden increase in industry demand?
1 – Increased popularity
MT5 is now widely recognised as one of the best online trading platforms in the industry. It is used by both new and experienced forex traders. As it’s popularity continues to grow, we’ve seen increasing demand for MT5 amongst forex brokers. This has led to increased availability, with more brokers offering MT5, and increased adoption, with more brokers expanding their MT5 product lines.
2 – Improved functionality
MT5 is well-known for its advanced trading functions and tools. MetaQuotes is continually improving its product and adding new features to the platform. Some of the most recent updates include additional web integration capabilities, a dedicated section for managing integrations, and of course, additional automation capabilities. As the platform has developed, we’ve seen more and more advanced traders switching from MT4 to MT5.
3 – Algorithmic trading
MT5 is a great choice for algorithmic traders. It has a strategy tester that is very helpful for optimizing algorithmic trading strategies. It also has backtesting procedures that enable traders to test EAs on multiple currencies simultaneously. These features combined make MT5 a much more powerful platform for traders looking to implement advanced, automated strategies.
Why is low latency trading important on MT5?
In terms of technology, MT5 offers more advanced features than MT4. However, these features take up more server resources. This is because MT5 holds more assets and more total instruments. It also sends more price updates and stores more trading history. In short, if you have price updates for 125 currency pairs it is X amounts of updates or ticks per second. Let’s say for ease of reference, that a normal amount could be roughly 1000 ticks per second. In MT5 you might have 10000 different assets and the updates per second during high volatility times easily reaches 250’000 tick updates per second, or X* 250. And the same goes for the trading history and charts for all these instruments. This increase in data flow requires a low latency setup.
Also, in terms of demand, MT5 is now more popular than MT4, with more clients now trading via MT5. This increase in demand also requires a low latency setup. This means you need to configure your network in a way that frees up more server resources. It also means managing your network in a way that ensures your company can offer low latency trading to all its clients, worldwide. Without fast trading on MT5, you may struggle to meet client demand for this platform and retain less clients over the long term.
As you can see, fast trading on MT5 is important. The best way to achieve it is by ensuring that your network can cope with the increased server load, and that your company can cope with an increased demand for MT5. One way to do this is by utilising outsourced MT5 access servers.
How can we help you speed up trading on MetaTrader5?
MT Proxy has an extensive network of MT5 access servers that are strategically located to ensure the lowest latency towards the major trading hubs worldwide. You can use our services to expand and optimise your trading infrastructure in a way that is both affordable and hassle-free. What’s more, you can also use our services to keep price data and other information closer to your clients, thereby reducing the pressure on your servers, and reducing your overall network latency. For more information, sign up for our free trial.