2022 FX Trading Software Recap: MT Still Dominant But Threatened, A Multi-Polar Market on the Horizon

With only the last few days left in 2022, Fazzaco takes you back to take stock of the FX trading software market throughout the year, what had happened so far and a bit of forecast of the coming year.

Compared with the ups and downs of the trading market (e.g. the crypto community has seen really dramatic scenes this year), the forex trading software market, which is not a trading market, and has been dominated by the MT of MetaQuotes for years, actually is not twists-filled. Its 2022 story can be described in a nutshell, and that is the MT suite is still dominant and not quite challenged, yet the Apple's removing them from App Store made it what now looks like a cranny in their foundation.

MetaTrader was the Only Winner in the FX Software Market in the First Half of 2022

By summarizing Fazzaco's news about trading software this year, we can tell that the majority of stories are about MetaTrader, especially after the removal of it from iOS in September. Besides, one of the most prominent trends this year is the "MT4-to-5" plan, something that MetaQuotes has been pushing since 2016.

MetaQuotes had already taken a number of steps to push MT5, such as terminating MT4 support, raising service fees, and halting MT4 white-labeling, among other things. They specifically enhanced the backtesting on MT5 and made it respond faster, as many investors prefer position-locking and order-pending in a one click. They preserved the multi-pair synchronization, but also added a Calendar and a slew of new charts. As a result, several brokers elected to use MT5.

Throughout the year, Fazzaco has covered stories about brokers introducing MT5, such as Saham Holding introducing it to the Saudi Stock Exchange​; INFINOX, a world-leading online broker, also introduced it at the beginning of 2022​, closely followed by Equiti Group​, a multi-asset provider; other brokers that joined the MT5 community this year include Hantec Markets​, and easyMarkets​, a dedicated forex and CFD trading broker in the middle of 2022. Furthermore, Saxo Japan has announced that it will discontinue support for the MT4 platform in September.

On the other hand, some other software have seen some progress too. Early this year, Solidus Capital announced the launch of SolidusX​, a multi-asset trading platform, as part of its efforts to expand businesses. SolidusX is a white-labeled version of DXtrade, Devexperts' SaaS trading solution for FX and CFD brokers. In June, Devexperts, the software company developing trading platforms for retail and institutional brokers, announced the release of DXtrade XT, a trading platform for exchange-traded instruments: stocks (whole, in fractional or notional shares), options, mutual funds, and fixed income (bonds).

Social Trading Platforms Rising to be A New Polar of the Market

Social trading is thriving, as corresponding trading solutions and platforms emerge to meet the growing demand from ordinary investors. Several financial organizations, including Germany's comdirect, Brokeree Solutions, a technology provider for multi-asset brokers, and Vantage, a multi-asset trading platform, have developed new social trading solutions throughout the year. With a market size of $2.22 billion in 2021, social trading is predicted to expand to $3.77 billion by 2028, rising at a 7.8% CAGR along the process (statistics from The Insight Partners). In 2021, the global forex market reached $702 billion (statistics from MarketWatch).

​Other significant market players include ZuluTrade​, NAGA​, Darwinex​, TickMill​, Collective2​, FX Junction​, Wikifolio, Axiory​, and AvaTrade​. eToro​ is leading this particular segment.

MT 4/5 Removed from Apple's iOS Might be the First Cranny Before the Possible MetaQuotes' Collapse

On September 24, Apple Inc. took down MT4 and MT5 from its iOS App Store without any prior notice, bringing impact to the entire community. Although users who had downloaded MT 4/5 from iOS previously are allowed to continue using them on their device, they are cut off from any further upgrade. Fazzaco, too, has published an article speculating the reasons behind this news the first time it broke out.

Initially, suspicions circulated that the ban was tied to Western sanctions against Russia, but this was quickly debunked. According to a comment, Apple prohibited MT4 and MT5 trading platforms because they allow automated trading robots, or EAs, which place trades on behalf of investors and are likely to be used to manipulate markets. Others believe the removal was triggered by a Forbes piece titled "How One Man Lost $1 Million To A Crypto 'Super Scam' Called Pig Butchering," which was published about half a month before the removal. Another issue is that MT4 and MT5 offer leveraged products that, if not managed properly, can result in massive losses for investors, which is against App Store guidelines.

Although a new version of MT5 web terminal was released in November as a way out, Apple's move may have already pushed forex brokers to consider alternatives or even developing their own trading platforms, as the market has seen a growing demand for cTrader, Match-trader, and other trading platforms. MetaQuotes must find a solution or risk losing its market dominance in the long run.

MT Removed from App Store & Higher Start-up Brokerage Threshold Indicate Possible Software Market Shake-up

Before the September app removal, let's first wind back the clock to early 2022, when MetaQuotes tightened its policy on granting white label licenses without clear criteria, which harms both white label suppliers and many forex start-ups because they are unsure what is allowed and what is not. According to sources, several forex start-ups fail to obtain an MT license even after three months.

Since MetaQuotes white label is almost no longer available to newcomers, they must seek either MT main label, several times more expensive than white label, or cTrader, which puts them in a more disadvantageous position when trying to survive: less popularity (compared to MetaQuotes), fewer assisting tools available, and more efforts in educating traders, regardless of white or main label. Some forex startups may seek to purchase an MT-licensed entity directly, but the cost can be astronomical.

When interviewed by Fazzaco, Alexander Geralis, the managing partner at Finthentic, said that, "for many providers these are turbulent times. The fact that there is opportunistic gouging and still no official clarity with MT situation does not help. Both brokers and WL providers will need to adapt. There are operational challenges for brokers but also commercial hurdles. Platforms are now almost exclusively volume-based in one way or another and they are expensive. Providers now take more of the broker's revenue. It can still be a very rewarding business but there are levels to this and you need to run your brokerage with this in mind."

In an article discussing MetaTrader at Fazzaco​, executives and managers from forex firms such as UpTrader, Technology Vector, NetShop ISP, GEMFOREX, CM Trading and Capex.com have all shared their distinctive opinions and insights with us.

So, how will the FX trading software market change in the year of 2023? Fazzaco will keep an eye on it with you. Meanwhile, we highly recommend the rest of the Fazzaco year-end 2022 recap articles to you.