When it comes to trading platforms, multiple complex elements are interconnected and harmoniously work together.
This software quickly and effectively simplifies the creation, sending, and carrying out of orders. A crucial component of this system is the “Forex bridge.”
The Concept of Liquidity Bridge
A liquidity bridge, also known as a Forex bridge, is a crucial component in Forex industry payment processing. It connects a trader’s platform to multiple liquidity sources, including banks and financial institutions, ensuring seamless and efficient execution of FX transactions. An FX bridge’s main function is to simplify trading orders and market data transmission between the top liquidity provider and the trading platform.
This link improves traders’ trading experience by giving them access to real-time pricing data, rapid trade confirmations, and other relevant data.
Forex bridges are essential for brokers and other financial institutions that need continuous access to substantial liquidity. They expedite the trading process by connecting trade orders to various liquidity sources, pooling liquidity for more competitive pricing, and matching orders with the best terms available.
Following trade execution, the bridge relays all the information, such as price, volume, and any associated fees, to the trader’s platform, guaranteeing a thorough trade confirmation and report.
What Are The Types?
Forex brokerages use two primary bridge types: STP (Straight Through Processing) and ECN (Electronic Communication Network).
STP Bridges streamlines the trading process by enabling direct connections between banks and brokerages. It also enables liquidity providers to execute FX trades directly on the interbank market.
Brokers can access various liquidity sources through ECN Bridges, creating a complete pool of liquidity. This system routes traders’ transactions via several liquidity providers connected to the ECN network to give them access to the best rates.
Selecting the Best Supplier
Take into account a few crucial elements for a bridge’s proper implementation. The server’s location greatly impacts efficiency; hosting in a financial centre guarantees excellent connectivity and minimal latency. Selecting a licensed data centre that complies with legal requirements and offers a strong defence against DDoS assaults and data breaches is essential for security.
The bridge must enable smooth data transmission and seamless connection with your trading software. Additionally, the likelihood of obtaining competitive pricing and deep liquidity is increased by a variety of liquidity sources connected to the bridge, such as non-bank providers and Tier 1 banks.
Conclusion
As we’ve discussed in the article, the features and performance of the FX bridge server strongly impact the success of the white label brokerage system as a whole. Thus, making the right choice can be essential.
