“Traditionally Admirals had been one of the longest serving MT4, MT5 brokers in the market,” said Admirals Chief Revenue Officer Daniel Skowronski in an interview last year. “But with changes in the landscape, we wanted to come out with something that’s a bit more user-friendly for our customers. There’s a whole new generation of traders coming into the market and we wanted to give them a much simpler interface, something that’s easy for them to trade and understand.”
Speaking in another interview from over a decade ago, when he was at brokerage group Alpari, Skowronski said something rather different after being asked how his company positioned itself.
“Alpari continues to be the oldest and largest MetaTrader broker in the world,” he said. “So our main focus is just the MetaTrader platform. We have a number of tools, whether it’s third-party or proprietary, to enhance our customers’ experience.”
What happened in the intervening period? You could put the shift in tone down to having to toe the line at different companies but I think it does reflect a wider trend. When FPFX CEO Justin Hertzberg was on the TradeInformer Podcast earlier this, he noted – and I am paraphrasing – that we may have the first new generation of retail traders who do not default to using MetaTrader 4 or 5 as their preferred platform.
There are three drivers behind this. One is what Skowronski was probably alluding to in that first quote.
Creating a simple and easy to use interface has been the goal of a lot of companies now for several years. We saw that in the stockbroking space with Robinhood and when I worked at Freetrade, one of the company’s main goals was to make investing more affordable but also simpler – hence a lot of work went into making sure the website and app design was intuitive and easy to use.
This has also filtered into the CFD trading industry. If you look at the UK market today, there is no major firm which uses MetaTrader as its core product. Established players like IG Group, CMC Markets, Plus500, eToro, City Index and Spreadex all have their own trading platform and app. Indeed, Plus500’s Chief Product and Risk Officer said in an interview earlier this year that a core part of the company’s success was the founders’ decision to make a simply designed mobile app.
Newer players like Capital.com have won market share from making an app that’s very easy to use. Similarly, Trading 212 – which has actually been around for a while – really started to succeed when it mixed a new product (commission-free stocks) with a very easy to use app. When I asked one broker CEO earlier this year why they don’t do much MT4 business, his answer was straightforward.
“I think the vast majority of clients look for simple platforms and easy to understand products,” he said, the inference being that MetaTrader 4 doesn’t meet that description.
The UK is not alone. If you look at XTB, for example, only 7% of their overall, nominal trading volume was on MT4 in the second quarter of this year – a figure in line with prior reported results.
Over in Asia, the success of moomoo in multiple jurisdictions, including Malaysia, Singapore, Japan, and Hong Kong suggests to me that the idea that the desire for a simple, easy to use application is a global phenomenon.
The second point here is that lots of these companies have added multiple products, not just CFDs. The reality is that adding these instruments is not straightforward to do with MetaQuotes products, particularly MT4.
The other factor driving this trend is to do with changes in MetaQuotes’s policies in the last few years.
We have reported on this multiple times previously but the simplest way to describe it would be that it’s becoming harder to access the company’s products and there is often a lack of clarity on what the policies are at the firm which guide this process.
For example, executives at three brokers, without any prior prompting on my part, noted a feeling that some firms are preferred over others and also expressed a more general frustration with how interactions with the company take place. With regard to the latter, the main point was that you can get totally different answers and service depending on who you are speaking to.
“It’s normal that at a company, some people that work there will be better at their job than others,” said one executive. “But at least their behaviour is based on a set of standards or policies, so if something is permitted, it’s permitted and vice versa. With them you can speak to one person and be told something isn’t allowed. Then you’ll speak to another person and they’ll say, ‘ok sure, let’s do it’.”
From the outside, all of this appears to have led to a perpetual feeling of uncertainty among some broker executives. For example, one consultant noted that, when helping start up brokers, they feel more certain about what a regulator will do than MetaQuotes. Similarly, another broker executive said he was aware of a situation where it took a broker almost a year to get approval from MetaQuotes, which was longer than it took for the firm to get regulatory approval.
The result, according to one executive who works extensively with multiple brokers on their technology stack, is that more firms have begun looking for alternatives. And whereas previously this was more likely to be big firms, it is now happening for small and medium-sized brokers too.
The executive noted that it tends to be a combination of firms looking for a branded product that helps them stand out in the market, frustration with MetaQuotes’s policies, and a kind of risk hedge, against any changes to MetaTrader’s products or policies which would mean their clients can’t access the platform.
This is the end?
All of this can make it seem like all is doom and gloom for MetaQuotes. I’m not sure that’s really the case though.
Last week we looked at the drop in MetaTrader 4 usage. Even taking that into account, the point remains that there are likely still thousands of companies using MT4. There has also been a big rise in the number using MT5 as well.
I think there are a few reasons for that.
1. Industry standard
For most companies in this industry, having a MetaQuotes offering feels almost a given. As one broker CEO put it to me, if you are a broker, you must have MetaTrader.
Even if they don’t do huge amounts of business through the platform, it’s worth noting that a lot of the big players do have it as an offering. And even if MT4 is only 7% of XTB’s business, 7% of XTB’s business is still a huge amount of money.
Another way you can see this is in the scramble for MT4 brokers. Today there is no company for sale that I am aware of, that is regulated and has an MT4 license. If there was, it would almost certainly have multiple buyers looking to acquire it immediately.
Finally, it’s worth keeping in mind the impressive staying power of MT4. This is a product that was released when I was still in year 6, listening to a CD Walkman, and playing GTA San Andreas on Playstation 2. How many of you still use a click wheel iPod or a fliptop phone from that era?
2. Nerd stuff and EAs
The next point is more about the ability to tweek MetaQuotes products. The more you get into MetaTrader, the more you realise it’s the kind of thing that appeals to the inner nerd that exists in many people around the world.
It is difficult to put into words what exactly this is but it’s the same instinct that someone who is obsessed with customising cars or jailbreaking iPhones has. You know you can add all these different tools and products around the platform to make it do cool things. Yours truly has even found this over the last couple of months, with a couple of fun features.
At the heart of this lies EAs. These are not new but they seem to be the core attraction for a lot of users. Anecdotally, this appears to particularly be the case for clients in Asia.
MetaQuotes is obviously not the only company to offer automated trading solutions but, for whatever reason, it has become famous for it.
3. IBs
Along with EAs, the primary reason that I am told brokers continue to like MetaTrader products is because of the IB systems it offers and the fact IBs like the platform. Again, this seems to be more pronounced in Asia than anywhere else.
I wish there was a more complicated point to analyse here but there isn’t. IBs like MetaTrader and often won’t use another platform. That’s basically it.
Not all over
MetaTrader is not going away any time soon but I think the shift we’ve already seen over the last few years has already resulted in significant changes that aren’t going away.
Firstly, having your own platform that’s simple and easy to use, particularly for mobile, is as ‘standard’ for a serious company today as having a MetaTrader offering is. That’s not going to change.
Secondly, the policies at MetaQuotes are pushing people to look for alternatives, whether that’s entirely or to have a second platform to counter the risk that something happens to their MetaTrader offering.
I also don’t think the policies driving this will change. Clearly something has happened that has caused MetaTrader to change tack over the past few years.
But then think of it from the owner’s perspective. They are making huge sums of money. They have no pressure from external shareholders to grow. Why bother taking on extra risk if that’s the case?
The simple version – MetaTrader will still be popular and perhaps even predominant, but not as popular or predominant as it once was.