Order Execution Models
Forex brokers use two primary models. A-book: all client trades are passed to a liquidity provider; the broker earns from spread/commission without market risk. B-book: the broker acts as counterparty, taking market risk but potentially earning more. Hybrid models distribute clients between A and B books based on trading profiles and profitability analysis.
For new brokers, a pure A-book model or hybrid with minimal B-book exposure is recommended. This minimizes financial risk when capital reserves are limited. As experience and capital grow, the B-book portion can gradually increase for specific profitable client segments.
Real-Time Monitoring and Alerts
Configure monitoring with alerts for: aggregate position exceeding thresholds by instrument, sudden volatility spikes, suspicious trading activity (latency arbitrage, news scraping). Monitoring must operate in real-time with mobile notifications to the risk manager for immediate response to developing situations.
The risk management module in MakeTrades includes real-time monitoring, automatic hedging, and flexible A/B book configuration.
