Virtual Dealer Plugin

[hyper]

The Virtual Dealer Plugin, by MetaQuotes (producer of the MetaTrader platform) is a nasty piece of software. It is used to intentionally delay traders' orders, in order to induce slippage. If the slippage is in the trader's favor, the trader's order is executed at the requested price instead of the better price, so effectively the broker keeps the savings. If the slippage is not in the trader's favor, the difference is passed on, so the trader loses. It is a form of cheating.

If you see that your orders always take more than 1 second to execute and you only ever see slippage that is not in your favor (and never in your favor), then it is likely that the broker is using the Virtual Dealer plugin.

Any broker who intentionally delays traders' orders are not treating their clients fairly, and it is therefore not recommended to trade through such brokers. It would be a lot like playing with a highly rigged poker machine. There are many other brokers out there, around 150 of which use the MetaTrader platform. Beginner traders should stick with the large and well-regarded reputable brokers. You can learn who they are by reading forums like Forex Factory. There is a long and old thread specifically about the Virtual Dealer plugin there: MT4 Brokers' Virtual Dealer Plug-In @ Forex Factory.

You can see below some documentation of this crooked piece of software:

Maybe we can share our own experience here of brokers who we think are using the Virtual Dealer plugin. It would be a useful list of brokers to avoid.


Here is Here is a link to the Virtual Dealer Plugin documentation: VirtualDealer versus Manual Execution: What Is Better?

 

[Pharaoh]

What's needed is a way to not just suspect, but to PROVE if a broker is using this.

We'd need 2 accounts registered under different names on the same server at the same broker. They should be traded through 2 accounts on the same MT4 VPS site (2 VPS accounts so that the IPs of the forex accounts aren't identical - we don't want the broker to know that there is a test going on, but we need the same VPS site to ensure a good and identical connection speed). The accounts trade different strategies most of the time, but every now and then, place simultaneous orders (1 buy and 1 sell) on the two accounts under "normal" market conditions and see if the entries are wider than the spread at the time.

 

[hyper]

That may work but may not be necessary.

If enough traders who use a particular MetaTrader broker report that execution of their orders always take longer than 1 or 2s and they never get slippage in their favor, then I think that's enough to conclude that the broker is using the Virtual Dealer Plugin and should therefore be avoided.

Even if the broker does not actually use the Virtual Dealer Plugin, such a broker who has bad execution and keeps the savings due to slippage that is in your favor should still be avoided. The broker is simply scalping off the trader.

From my experience, I believe FIGfx uses the Virtual Dealer Plugin. My orders would usually take over 4s to execute, and slippage occurs very often and never in my favor.

This quote by a client on this web site confirms that FIGfx uses the Virtual Dealer Plugin:

In the chat session I was told that the virtual dealer would take 2 or 3 seconds not the usual 6-8 or more and only after the price has moved.

 

[cowmadagan]

Virtual dealer....sounds like someone selling oregano in plastic baggies.

 

[ernest8fingers]

toast

I programmed EA's for MT4 and I can tell you that a Broker doesnt need this VDP. There are enough parameter settings on their Back-Office server software to turn your account into toast. The decent Brokers behave themselves-the others are out to steal your money. A Broker using MT4 software is in complete control of YOUR trading account. Like Hyper said-just leave the Broker the SECOND you think you are being cheated. Of course, only experience will enable one to identify when this is happening.

 

[BILLY JOE]

Virtual Dealing Desk Software

Some one has created a indicator to detected this Virtual Dealing Desk Software , just searchYoutube for mt4 virtual dealer plug-in
or fallow this link.

YouTube - MT4 Virtual Dealer Plugin and Suspicius Broker Activity Detection - 4xSentinel

It seen to work by analyzing ) your trade, spread, slippage and execution times.

 

[Tomdickandharry]

I programmed EA's for MT4 and I can tell you that a Broker doesnt need this VDP. There are enough parameter settings on their Back-Office server software to turn your account into toast. The decent Brokers behave themselves-the others are out to steal your money. A Broker using MT4 software is in complete control of YOUR trading account. Like Hyper said-just leave the Broker the SECOND you think you are being cheated. Of course, only experience will enable one to identify when this is happening.

ernest8fingers,

Could you recommend any particular broker that you believe is decent, doesn't use Virtual Dealer Plug in or an other back office tricks and isn't a bucket shop where someone could open an account and use a fairly decent EA that makes good money when it isn't being hampered by the broker? I'm looking for a fair, decent broker. Thanks in advance from a newb.

 

[MichelAnge21]

This can be a concern only for scalpers who are after a few pips profit per trade and/or use scalping EAs.
My own broker has some slippage, but it sometimes goes in my favour, so I dont care. I dont use EAs either.
There is simply one thing I d like to say. That your broker has some execution delay is no proof they re trying to rip you off. You should know that there s no such thing as a mini lot or even a standard 100k lot in the interbank market. Those banks exchange 1 M lots. So your order must be " repackaged " in some way before it reaches the open market unless another retail trader happens to be available as your conterparty.
That is why demo accounts might perform better than live accounts even with " honest brokers ". Your order on a demo account never needs repackaging and bundling with other retail orders.

There are brokers with instant execution, but they are often market makers who simply trade against YOU for a fraction of a second. They take your order instantly and they assume the risk of being your conterparty for the short time it takes for them to turn around, bundle the orders together and hedge their position on the open market ( those are the few " honest " market makers of course...a rare breed of course; most will do all that BEFORE they confirm your order) .

Finally, there is ping time that is the limited speed signals travel even with modern fiber optics added to the server s reaction time. If you re in the USA and your broker is in Australia, you cant get anything better than 200-250 ms ping for the round trip: already one fifth of a second. You might want to check where is your broker s closest server located ( some brokers have servers in multiple locations ) because your EA sends queries to your broker that will be answered only after one round trip ( already giving you a slightly outdated quote ) and you need one half ping for the order to go back to the broker.

 

[David R Long]

What an excellent article. Does anyone know the full list of parameters for this product?

 

[Laurie Gold]

Very Informative

Like it isn't hard enough trying to figure out which way the market is going to go. You also have to be aware of your broker messing with your orders. I always hear that the percentage of retail traders that fail is between 93 and 98%, I wonder how much of that is because of the brokers.