LMAX Soft Launch MetaTrader 4

Earlier this week LMAX (who have now started to refer to themselves as LMAX Exchange instead of LMAX Trader) quietly started allowing existing customers to trade on their multilateral trading facility using MetaTrader 4, but they're not advertising that fact!

Whilst the platform is the same old MT4 that you may well be familiar with, other aspects of trading at LMAX using MetaTrader will almost certainly not be what you're used to.  For example, currently LMAX do not offer demo accounts and to start live trading you firstly need to open an LMAX Classic account with a minimum of $10,000. Having done that you can then ask LMAX to transfer part of your deposit to an LMAX MT4 trading account, and start trading at a minimum size of one standard LMAX lot (10,000 units of the underlying currency, equivalent to a MetaTrader "mini-lot") with leverage of 100:1.

Unable to resist such a temptation I transferred £500 from my main LMAX account yesterday and then installed LMAX MT4 on our UK VPS.  The MT4 setup program provided by LMAX proved to be unbranded, but once installed it became evident that LMAX are actually using bridge technology supplied by PrimeXM. Next I copied the latest version of Ray Robot II into the newly created experts folder, and then set him running on a daily chart of GBP/USD shortly after 11 PM last night, with exactly the same settings as he's using in our long term MT4 spread betting test. By lunchtime today this is how things looked:

LMAX MetaTrader chart for GBP/USD on March 2nd 2012

The first thing to notice is that the chart contains every daily bar of historical data that LMAX currently provide, so doing much in the way of backtesting is going to be rather tricky! Secondly, LMAX's flavour of MT4 runs on UK time rather than European time. As luck would have it "yesterday's" high and low came out roughly the same at LMAX, Alpari and GKFX, but we'll have to tinker a bit with Ray's inner workings in an endeavour to better compare like with like in the future.

When the screenshot shown above was taken Ray was already short, and a bit later in the day his 50 pip target was reached, revealing another thing not often seen in a MetaTrader 4 screenshot:

Ray pays 50 pence commission on his first live LMAX MT4 trade

As you can see, Ray had to part with 50p in commission on his first trade, but at least he had the consolation that this unusual overhead came out of the proceeds of a profitable first trade rather than his deposit. If you look very carefully you might also notice that Ray profited from sufficient positive slippage on his limit order exit to cover that commission.

Another consolation that you might expect for paying commission is lower spreads, and here's a snapshot of how LMAX's looked in the early afternoon today:

Some sample LMAX MetaTrader 4 quotes on the afternoon of March 2nd 2012

0.9 pips on cable is certainly less than Ray is used to paying on his other live test accounts. In total 30 FX pairs are available, plus gold and silver as you can see. No CFDs as yet though.

If you're a MetaTrader fan and you like what you've seen so far of LMAX's flavour of MT4, but you don't have $10,000 available to tie up while you evaluate it, there are one or two options open to you. LMAX assure me that (for the moment at least) if you're willing and able to deposit $1,000 with them they will allow you to evaluate their new platform in live trading, but they will expect you to deposit an additional $9,000 in due course if you decide trade through them long term.

Alternatively you might prefer to visit the website of Estonian broker Armada Markets, on which they say that "LMAX connectivity gives our clients exclusive access to extremely tight spreads, unmatched liquidity, speed of execution and pricing transparency", and where they offer more conventional free MetaTrader demo accounts. Armada's "primeExchange" account sounds a lot like LMAX's own MetaTrader account with added "micro-lots" and slightly lower commissions, whereas their "primeClassic" account has significantly wider spreads, but no commissions whatsoever and maximum leverage of 500:1.