Trade Processor overview: how the liquidity bridge benefits brokers with large volumes
Author: Alexey Kutsenko
The Trade Processor (TP) liquidity bridge was designed by TFB to meet the demands of very different retail brokers. It is a comprehensive solution that allows flexibility and a custom approach, has all the features that brokerages need, and stays user-friendly without compromising quality.
Today, we will detail the ways Trade Processor is built and showcase how it fits brokerages with many clients and large daily volumes.
Built to last
1. Trade Processor is stable and scalable.
The bridge components are installed separately from each other. This means that if one of the components’ hardware boxes fails, the rest is not affected, and trading continues. Such architecture also ensures scalability and is a good fit for companies that grow over time.
As more traders are connected, and with the volume growth, the workload on the bridge increases. A scalable solution can adapt to changes quickly, and brokers will not be faced with an urgent need to swap their most critical infrastructure component.
Built-in backup features secure the data in the unlikely event of failure. The Backup LP tool switches to a secondary Liquidity Provider if the first one stops responding. Additionally, users can backup the TP configuration.
2. It is transparent.
Transparency and understanding of what happens inside the bridge are essential for all brokerages. With Trade Processor, brokers can see all their settings and modify them to their liking. There is no central panel where decisions are made, so each bridge installation is custom and different. For example, brokers can create client groups and set the routing rules specific to them.
3. Supportive of brokers’ choices
Trade Processor has FIX APIs that allow brokers to integrate any third-party solutions. Future integrations are always an option, and the bridge is not in the way if the brokerage needs to introduce a new tool into the environment.
If the liquidity bridge is the heart of the brokerage, then execution is the heart of the bridge.
Trade Processor supports advanced execution, which is achieved through multiple instruments:
Trade Processor works with a wide variety of Liquidity Providers. Brokers can have their private pools and select the LPs they want to work with.
Multiple aggregation modes
Getting the best pricing for traders is one of the top ongoing struggles every broker is dealing with. A lot of the pain can be avoided with the right aggregation.
Every client and order is different, so they might require a different approach which is reached through various aggregation modes. Trade Processor supports six different aggregation types: Single book, Multibook, Multibook except close, Net except close, Multibook proportional, and Multibook proportional except close.
The TFB team created the Multibook except close mode as a response to common broker frustrations. When sell and buy requests are spread across many LPs, consolidating them at the end of the day can be dreadful. Trade Processor tracks all details about the order (where they were opened and by whom). This allows TP to execute the order with the LP that it was originally placed with. Additionally, we avoid having open orders in the system for too long, causing higher spreads and added swaps that cancel out the profit.
When a large order is placed, it might wipe out all liquidity on the market and get executed with higher pricing. The Continuous execution feature is used to avoid this and help brokers get the best pricing for their traders. Brokers need to set the maximum size of orders for the feature to be activated.
It works as follows: a large order is split into smaller ones and executed over time. Then all the pieces are put together, and the volume-weighted average price is calculated. Such a method of execution takes more time, but the end price is much better for traders.
This feature can be set up to automatically consolidate orders at the end of each day. It can be a significant time-saver for brokers with large volumes. Plus, it eliminates the risk of making an error as often happens with manual processes.
More than a liquidity bridge
Apart from the main functions, Trade Processor goes the extra mile and offers more services to its clients. Users can access the monitoring page of TP for a real-time glance at the state of the system components. So, suppose the broker notices changes in the solution's performance or would like to make sure there are no upcoming technological challenges. In that case, they can review it instantly through that same interface.
The economic calendar in the bridge shows all significant events that have recently happened globally. The tool works in real-time and can be used to analyse traders’ behaviours or plan for internal strategy adjustments.
Supporting an ecosystem of solutions
Last but not least, the bridge becomes even more powerful if there is an ecosystem of software solutions that add to its functionality and expand it further.
The huge benefit of having access to such tools is that they are natively designed and, therefore, fully compatible with the bridge. This means that they will cause no issue or conflict if implemented together.
So, when brokers decide to offer PAMM services to their traders, they can install the TFB PAMM and have it up and running instantaneously without worrying about possible conflicts, freezes, or issues now or with future updates.
Trade Processor is currently supported by:
- TFB PAMM for custom money management
- Brokerage Business Intelligence for data monitoring, reporting, and management
- TFB Plugins that target specific individual issues
There are many more features and tools in Trade Processor that we didn’t mention in today’s article. If you’d like to learn more about the bridge or any other TFB solution, please feel free to email us at firstname.lastname@example.org.
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