Software development in the retail FX Industry

Even though online currency trading was nearly the last market to become available for the regular people, the level of software development in this industry has managed quickly overtake the rest of the markets. Let’s find out how and why.

Beginning of the retail Forex software era

When currency trading has just started, some 50 years ago, people used to trade via telecommunication networks. Then the monitors were introduced and the need of charting was established. It took the industry some 40 more years to develop so it can be actually available to nearly anyone. In the early 90’s online Forex trading has been booming, but the companies were facing quite a challenge - the lack of software. In other words, those were the times when a broker needed to have its own trading platform in order to offer online currency trading to its clients. This is why you can now see the oldest FX brokers, like Oanda and FXCM, offering some exotic trading platforms that are not available elsewhere.

MetaTrader 4 era

I am not sure where MetaTrader 4(MT4) was the first third-party software for trading currencies online, but it certainly became the last for nearly a decade. It all started in the year 2005 when the first brokers were adopting MT4 and offering trading only through it. WIthin some few years, the platform was used by the largest part of the FX brokers, thi has happened due to the advancements of the platforms, its ease of access for the brokers and most importantly - the pricing. In just 5 years there were almost no brokers that weren’t offering MT4 as a part of their software suit. It seemed like MT4 will have quite a monopoly in the retail FX software industry, but that’s not what happened after.

Post MT4 era

Even though MT4 is widely used now, traders feel that it is outdated and not as robust as they would like their platform to be. MetaQuotes, a software developer behind MT4, was of course looking to increase the scope of their services. However, most of their efforts were aimed on launching MetaTrader 5 (MT5), the platform that hasn’t gotten much popularity within the trading community.

While MetaQuotes was resting on its laurels, some other software developers have appeared in this industry, and, a few have been actually deliver better products. Not every trading software piece became popular, as the pricing is still a major issue. However, we can highlight Spotware, a company behind probably the best trading platform - cTrader, as it could develop a great, fast, robust trading platform in just a few years. What is also great about cTrader is that it receives updates quite often and is constantly getting improved. Next to this, whole suit of cTrader products increases, as the company adds such platforms as cMirror, cBot and so on.

There are of course many more software developers in this industry, yet none of them has managed to provide MetaQuotes with a similar level of competition as cTrader did. You may preview more currency trading platforms here.

Another interesting detail to highlight is that the last years gave birth to quite a few large software companies that focused on the development of the binary options software. Even though that these programs would also fall into retail FX industry, I am not highlighting them in this article as they mostly come as a turnkey solution for a broker (including CRM, IB management etc) rather than just a trading platform.

Conclusion

Retail FX is an industry that can deliver extensive returns and the software development is rather important to achieve sustainable growth and deliver more value for the customers. Till today, most of the brokers are still using MT4, a platform that has not been majorly updated for years. Will it stay like this for the next 3-4 years? I strongly doubt that.