Starting a brokerage based on Open-Source platform

Discussion in 'Forex Brokers' started by mcgene4xpro, May 8, 2013.

  1. Hi

    I am trying to evaluate the advantage/disadvantages associated with starting my brokerage using an open source platform, specifically, M4 " Not MT4"
    the advantages is quite obvious. However, selecting a trading platform other than the most popular one would bring some risk.

    Also, M4 seems not a complete suite that will require a considerable degree of on-going development. I have seen some reputable and successful brokerages have their own platform such as Duka "jforex" , Oanda"fxTrade". Thus, having a private brand platform has nothing to do with the success of a brokerage.

    No bias here to any direction. I am just trying to find out if it would be a good decision for me or not. Specially, i am not a programmer myself.

    Your input is much appreciated.

  2. No response !!...

    It seems a very bad idea.. :)
  3. Primarly no, you just think that people are ready to answer a complex question the moment you ask it without you paying.

    It is a bad idea. It is good enough to analyze it, but "open source" is not something that will sell it- the rest of the business plan must be there.
  4. Humpy


    Just for a starter question - what sort of capital reserves have you for this project ?

    To the nearest 10 million will do.

    Lots of new FX brokers have popped up recently.
    Some like Alpari have set up in another country.
    Some are hq ed in some dodgy countries like Cyprus, Nigeria, Mauritious etc.

    What would make yours special ?
  5. My intention was to discuss and get opinions about technology providers not my business plan.

    I have a new business plan and i think i could provide a better service for traders.

    The capital associated is enough. However, i know there are many packages out there that could get you start cheap. Naturally, with a compromise.
    Using white label brokerage and/or white label technology would decrease the capital needed dramatically.

    I would like to get specific inputs about using open source platform specifically M4.
  6. I am looking for the free advice/opinion that people get it from an open forum such as ET. If i need a consultation, i would go to different destination.

    You might be right that this kind of questions might need a pro opinion but before getting such advice, i would like to know what in-depth specifically i would need to ask or inquire about.

    Now, i have an 15k offer to get my own M4 and let us say i would pay around 5k monthly for continuous development. Or i have to pay around 60k to get WL MT4 platform.

    I am worry that this open source might have many bugs, or i will be hostage to their programmers for development because they know the code. or at the middle of the project i will find myself facing a dead end.

    I am not programmer so my worries actually more than usual for such a project.

    In front of my eyes, i see jforex and fxtrade.. So, why not?
  7. You would have enormous exposure if the platform induced errors and/or was unreliable. Your customers would sue you.

    I do not know the software, but just because it exists proves nothing about its reliability or robustness.

    There is no advantage to you in its being "open source" if you are not a developer.

    Most code projects are an architectural mess and are unmaintainable except by the original authors. Are you aware of that? There are exceptions but you seem to be assuming this is an exception without proof.

    Looking at the web page for the software, the APIs it supports are mostly or entirely retail brokers. This suggests to me that it was not originally developed as a broker platform, but rather as a retail product.

    Why don't you license a proven white-label platform instead? For example, Saxo Bank or Interactive Brokers or many others. The Saxo platform can be interfaced to providers other than Saxo. CitiFX used to use it.
  8. A convincing response. I thought about this exposure risk if it is significantly error-prone. It is scary.

    I am also got this feeling that this software might be developed originally as retail end user.

    I am open for suggestions and i am going to further look at Saxo and other similar

  9. Yes, while M4 has been stable for several years, it is true that if a customer introduces bugs of their own and does not have a proper license agreement in place, they're asking for trouble.

    Most of our products are intended for companies who either have professional developers on staff or can hire professional developers. Professional development requires programming, great error handling, beta testing, end user and programmer documentation, etc. Trading software can't just be thrown together overnight. Putting buggy software in the hands of traders is asking for trouble. I agree with that.

    Again you're correct, if the customer can't modify the code or have it modified, there's no sense in using an open source product. Our product in particular /requires/ customization. It is 80% to 90% of a completed application - it needs further development, testing and documentation to make it a ready-to-use product.

    And once again, you're correct that our product was originally a retail solution. Although we've recently introduced a new data server, trade server and we're developing a CRM, etc. It's just that most of our customers already have this stuff in place. I'd like to mention that we're developing a complete forex brokerage solution similar to MetaTrader that will come out later this year (open source).

    I'd also agree that Saxo bank or something else might be more appropriate for mcgene if he doesn't need a highly customized product. Our offerings are only for those who want a highly customized solution.

    By the way... does anyone here plan on attending eTradersExpo in a couple weeks? I'm doing a new product launch in that show. I'm thinking about buying an email blast from Baron to help launch it.
  10. Pipflow


    Let me a good trader first then think of opening a brokerage firm.
    #10     Jul 2, 2013