A deep dive into bridging: key points from the webinar with TFB’s CEO
This week, Alexey Kutsenko, the CEO at TFB, hosted a technical webinar and a Q&A session centered around bridging technology.
In this article, we are providing a recap highlighting the key points. You can find the presentation slides here.
How the architecture and the structure of the TFB bridge stand out
The Trade Processor (TP) liquidity bridge was created with the goal of offering the best performance while simultaneously giving complete control to brokers.
At the time, many of the infrastructure's critical components were out of the brokers’ reach, leading to poor transparency and higher risks. In response, the Trade Processor was designed to be fully integrated into the broker's infrastructure.
Instead of using the standard hubs, Trade Processor could be installed directly onto the brokerage’s servers, leading to a shorter network delay between the bridge solution and trading platforms.
The traditional approach of keeping the liquidity bridge closer to liquidities makes sense, but TFB’s way offers more flexibility and better performance overall because not all orders go to the LP; some of them are handled inside the bridge, such as during aggregation.
At the same time, Trade Processor is also offered as a cloud-based solution, similar to the standard hub version. It is still a separate version of the bridge that is running in TFB’s cloud, allowing brokers to focus on the business side and not worry about the technical aspect of the solution.
Decentralised setup: key benefits
A decentralised setup means separate instances of the product work as independent software components.
The advantage of such a setup is that if there is an issue with the server where one of the components is installed, the rest of the components remain unaffected since they are installed on other servers. This makes the bridge more immune to risks and disasters, leading to a more stable service by the broker.
Simultaneously, the decentralised setup allows the broker to remain in full control of the critical business components. Should the broker have multiple locations, a decentralised setup allows TFB to install components in the same data centers where the broker is based.
Smart routing and aggregation
Smart routing is able to complement and even outperform aggregation.
The routing system built into the Trade Processor bridge enables brokers to specify different execution patterns based on many parameters, such as:
- Session time
- Order type
Using them, brokers achieve maximum flexibility and can set up different execution rules for different types of clients and orders. Not only can they specify LP selection, but all related execution options, such as markups, delays, and aggregation types.
Small but life-changing features of the TFB bridge
There are many small tools and features that make a huge difference and improve daily operations.
We’ve already mentioned execution patterns that can be specified via presets and enabled or disabled immediately. The same system allows control of quotes flow with its own patterns and presets.
Another useful feature is the consolidation volume tool which brokers can use to minimise the opposite position on liquidities in case the aggregation or routing is configured for multiple liquidity providers.
The A/B risk tool allows brokers to switch between A- and B-book to hedge risks without having to do the additional manual work.
There are 3 types of FIX API in the Trade Processor liquidity bridge that are used for different purposes:
- FIX API to easily connect external platforms to TP, without requiring extensive integrations. This FIX API has extended fields that allow brokers to send additional information about the clients' login, group, and country via FIX. The Trade Processor processes the data and handles orders according to execution rules for those specific traders.
- FIX API with MT5 margin account synchronisation to distribute the liquidity and allow clients to trade via FIX API. In that scenario, all orders and positions are executed on the MT5 specified account and its margin engine.
- FIX API with its own margin engine to allow brokers to create accounts inside the TP, manage its balances, equity, margin, and positions like in any other trading platform. This gives brokers independence from third-party software when it comes to liquidity distribution.
The Margin Engine is a system close to trading platforms by its functionality.
The Margin Engine allows brokers to manage accounts, balance, equity, and positions, set up swaps and margin levels, and configure available symbols. It is helpful for all brokers who want to distribute their own liquidity to other brokers or professional traders via FIX protocol.
Every approach to bridging has its pros and cons, and different setups would work differently for each individual brokerage, so it is always best to trial different solutions for your unique circumstances.
A decentralised architecture reduces the risks of failures and freezes, smart routing adds flexibility and efficiency of aggregation, the built-in FIX API helps integrate any third-party solution with the bridge.
If you’d like to learn more about Trade Processor and test it out in your environment, email us at firstname.lastname@example.org.
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