Matching Engine is a MetaTrader 5 plugin that matches transactions like on an exchange so that traders trade against each other, not against the broker.
Pricing
Example price for a single MT5 server
Setup: $999
Monthly fee: $799
Volume fee: $2 per 1 million USD traded
Reference Information on Matching Engine
In the early 1980s, US market participants such as brokers and traders launched a matching engine in order to add auction trading in an open format. Thus, computers had changed the flow of capital and finance. Chicago Stock Exchange was a pioneer who got the matching engine rolling.
Since 2010, the procedure of matching orders has become exclusively automated.
Functions of the Matching Engine
There are different functions the matching engine accomplishes, such as:
- ensuring transaction integrity for a marketplace, an electronic trading venue, or exchange,
- using various algorithms such as pro-rata algorithm to facilitate work with spreads and to implement files with large limit orders,
- fulfill a variety of orders,
- ensure full reserve of balance at the end of working hours.
Orders and Order Book
Working with the matching engine, the broker has to be aware of several notions.
Orders. Every matching engine provides traders with a variety of orders, the most popular of them being:
- Market orders are orders that are filled immediately at the best current price. In this type of order, there are two strategies that concern volume. The first one is to buy all that is available at the current price. The second one is to buy only the requested volume or to cancel.
- Limit orders are orders that set a price. After a limit order is placed, a trade can be performed if the market price reaches the client's limit price or the best price.
- Stop orders are activated after the price reaches a particular level. Then they are automatically transformed into market orders.
Order Book. It looks like a list of buy or sell orders. They are categorized by volumes and prices. To identify the correct choice under the intended conditions, the matching engine checks every new order against the order book.
