The foreign exchange market is very chaotic and complicated. Did you know that it generates more than five trillion dollars a day? Perhaps you did, and that’s what interested you in becoming a part of this industry, or maybe it has always been your dream to own a financial brokerage company one day. One does not necessarily need a finance degree to excel in the foreign exchange market, but you do need a whole lot of wit, determination, and patience, and of course, it goes without saying that you need the right partners that will help you succeed.
Foreign exchange is a competitive industry, and no central organization controls the foreign exchange market, but many independent agencies that supervise its workings. Brokers provide customers with the means to trade financial instruments. FX Brokers allow us to trade currencies for the sole purpose of buying, selling and exchanging.
To make things easier for you, we have summarized the steps you’ll need to follow to start your own brokerage company successfully.
Having robust knowledge of the industry you’re about to step in is essential if want your brokerage company to succeed. You need to ensure that you have enough experience as a retail forex trader and have attended enough forex training to know what reliable materials or data you require. You should know what your target market will be because forex licensing varies from country to country. The regulatory requirements are determined by the specific country in which you will be actively seeking traders.
Your business Plan
Your business plan will state how you intend to make money from your business, your mission and goals. It will help you test your ideas before risking real money. To stay on top of this competitive industry, you should know your competitors. Because you will be competing with firms from all over the world, it is better to strategize in a way that gets you a good share of the market.
As a Forex brokerage, you’ll be needing separate operating and trading funds. A minimum required capital has already been set in Forex legislation for Forex businesses who are either based locally who are seeking clients living in the jurisdiction. Your brokerage company should have enough funds set aside to cover the costs during the first months of operation.
Incorporation and Licensing
You can only license or register your company after you have incorporated. For your brokerage company to be allowed to operate, you need to obtain a license. Regulation is something that all customers look for in brokerage company. This is a very crucial step as this license regulates the workings of this industry and protects Forex traders.The bank you will choose depends on the country your company will be registered in. It is advisable that you have more than one bank account and payment service providers as a backup.
Choosing the right software solutions
You will need the proper solutions in order to manage the big amount of data coming from the traders that will be subscribing to your company. LEAN WORK’s flagship products Broker Work and Trader Work will help you manage your data more efficiently. The first is All-in-one SaaS solution for FX Brokers: FX Back Office, CRM and Built-in IB Portal whereas the latter is a complete Trader's cabinet where deposits, withdrawal requests and internal transfers will be just a click away for traders.
Develop and Design a website
Use modern day technology to your advantage. The presence of your company on various online and media platforms is essential for the promotion of your business. This way you can not only engage with your customers, but they will also have easy access to specifications and brokerage services you provide.You can either develop your website in-house or outsource the service. For example, when LEAN WORK opened its first office in Europe coming from China, we made a research to find a good web development agency, that could embrace a European style for our EU website. We found in Convertico Media a very professional solution for our needs, and they demonstrated also to be highly skilled in the development of websites for some of our clients. If you don’t have a web developer department in your company, the best solution is to entrust a team of professionals to do the job.
Have a User-Friendly Forex Trading Platform
You will need to have a secure and user-friendly Forex trading platform which is a set of programs for brokers and traders. How much money you will be making is determined by the number of people that will register and trade on your Forex trading platform. Developing a learning tool for Forex trading will definitely attract more customers towards your trading platform. If you just start the FX brokerage business, it is not advised to develop your own trading platform at beginning but to choose from existing popular platforms. MT4, MT5, cTrader all are good choices and LEAN WORK has done the full integration with these major platforms in the world.
Setting up an office
Pleasant atmosphere, cooperative staff, and a nice modern office will kick-start your company and help you form a relationship of positivity and trust with your customers. Pay more attention to staff training or in developing a market strategy if you can invest in an effective office space.
Professional and talented staff
Your staff will determine how far your company will go. A strong team should be able to attract customers, promote active trades, open accounts, support the working of the trading platform, develop promotional materials and maintain a healthy relationship with its customers.
Congratulations! You have successfully started your brokerage and now –with the help of a competent team –are on the road to success. The opening of an account by your first customer means that all steps you followed up till now are correct.
The forex industry is not just about making money. You can create a lot of profits using the lessons you learn. If you want to stay at the top of your game and do not want to lose clients to a stronger competition, you need to demonstrate the value of their offering through high client satisfaction.