What does A Book Mean When Trading Forex?
The acronyms and jargon that are part of the online forex trading industry can often create confusion and misunderstanding for those who are relatively new to the business. As seasoned industry consultants who help entrepreneurs launch their own forex brokerages, we understand the need to understand the basic concepts behind the business.
A Real Time Example of How A Book Works
Imagine a scenario where a broker receives an order to buy 100,000 of EUR/USD. In the case of an A book broker, this order would immediately be forwarded, or passed on to the liquidity provider that the broker has partnered with. So to revisit the example, if the trader places a buy order, the broker will also place the same buy order with its liquidity provider.
You may wonder how a forex broker makes money with A Book? In the case of our example, the broker will add a mark up on the spread. For example, if the spread that the broker receives for EUR/USD is .3, the broker may mark up this value to 1.3 In such a situation the broker would earn 1 point, or pip, every time their client trades EUR/USD.
How Brokers Make Money Under The A Book Model
Of course it’s rare that a broker would only have a single client so you can imagine that a broker will begin to generate significant revenue after onboarding only a handful of clients. Rather than a single trader, let’s imagine the broker had 100 clients, each trading EUR/USD 10 times a day. That would equate to 1,000 pips of revenue on a daily basis!
Launch Your Own Forex Broker Today
Launch Your Own Forex Broker Today
If you are ready to launch your own forex trading business, don’t hesitate to contact us today. We have years of experience in the forex trading industry, making us an ideal partner to help you launch your own forex trading brokerage.
What is Web MT4? – 3 Reasons Your FX Broker Should Offer Web MT4
What is Web MT4?
Web MT4 is the website, or browser based release of the popular Windows based trading platform known as MetaTrader 4 (MT4). Prior to web MT4, traders using Mac or Linux operating systems had to find interesting work arounds to use the Windows version of MetaTrader 4. In order to cater to these traders and also fulfill a much requested demand by traders across the globe, Metaquotes has recently released web MT4 to the public.
The official announcement by MetaQuotes lists the following benefits:
- Full trading functionality, including one-click trading, pending and market orders;
- 9 different charting time frames;
- Ability to integrate the platform directly onto broker websites via an iframe widget;
- Basic technical analysis tools;
- Real time quotes
Brokers that are new to MT4 or established firms that currently only use the desktop version should consider some of the advantages in offering web MT4:
3 Reasons Forex Brokers Should Strongly Consider Web MT4
#1. Web MT4 Now Makes it Possible for Mac & Linux Users to Trade with MetaTrader 4
Although smartphone trading has taken off in the past few years, there are plenty of traders who still use Macintosh desktop PCs. In addition, Linux users interested in MT4 could also benefit from a web version of the software; prior to the release of MT4 web trader, the only work around was using a VPS. The VPS route was a great work around but created a fair amount of work for potential users and most likely acted as a deterrent to many potential clients. Now that web MT4 has been released, Mac and Linux users have the same trading access that the rest of the community has enjoyed.
#2. Web MT4 Makes Trading Even Easier
With the trend of software applications continuing in the direction of “the cloud” it’s far easier to manage a trading platform with other browser windows than a stand alone desktop program, the latter becoming less and less relevant as time goes by. No doubt there will be hardcore fans of the MT4 desktop program, however, plenty of new traders will be far more used to a web-only option.
Another advantage is that web-based software rarely gets infected with viruses and users completely avoid installation headaches that may conflict with anti-virus software. When updates happen in web MT4, the user must simply reload the browser than wait for the system to update. A final benefit is portability, namely that traders can use the web version of MT4 on any PC without having to constantly uninstall and reinstall the software.
#3. Staying Competitive
Web MT4 was a popular software release with many brokers now adopting the platform. If your brokerage wishes to stay competitive, you should strongly consider having web MT4 as part of your offering. The reason is that some traders simply prefer a web-based platform over software that needs to be installed, has the potential to crash, and can create conflicts with other programs. A broker offering web MT4 can remain competitive in today’s industry by offering its traders and a full suite of platforms to select from: Windows, tablet, mobile, as well as web.
Forex Consulting Services – Your Partner for Launching an MT4 White Label & Starting a Forex Broker
If you are interested in launching your own MT4 / MT5 white label, we are the ideal partner to help you out. We have the necessary technology, liquidity and team of experts to guide you every step of the way.
Contact us today to learn more about starting a forex broker or establishing an MT4/ MT5 white label!
The Secret to a Successful Forex Broker – A Helpful Tip for Those Interested in Launching a Profitable Forex Broker
We would like to reveal a secret that is very simple to understand but often overlooked by IBs, forex brokers, and white label providers alike. In our view, this helpful secret is often overlooked because it’s a common practice to measure the success of your forex brokerage by only a single measurement: the number of new accounts.
Why Do Some Forex Brokers Often Overlook the Obvious?
By focusing only on opening up new accounts, many forex brokers happen to miss the big picture. Before we get into this secret in more detail, let’s understand why this important aspect of the business often gets swept aside.
First, what one broker determines to be a success could be different from the standpoint of another brokerage. For example, some forex brokers aspire to create a global brand with footprints in every major city along with football and cricket endorsements. Other brokers, however, simply want to run a small business that will become profitable. If you were to poll both of those brokers about what they felt would result in success for their business, the number of accounts that they would consider to be successful would be drastically different.
Secondly, a strategy centered only on opening up new accounts is quite labor intensive. Opening up a new account at your forex broker involves many moving parts: compliance, operations, marketing, sales, and reporting to name a few. In short, there is plenty of work involved just to onboard a single client, let alone 100 or 1,000.
Regardless of what defines success for your broker, it will be severely limited if our suggestion is overlooked.
What’s the Secret to a Running a Successful & Profitable Forex Broker?
Our secret, which might come as a surprise for how simple it sounds, is to maintain an excellent relationship with your existing client base. That’s it!
For those who’ve spent time in sales or are working with a sales team, imagine the work that is involved in signing up a new client: application, funding, documentation, account creation, etc. Now think about the effort it takes to pick up the phone and reach out to an existing customer. If a good relationship is there, this should come quite naturally, as one would speak to a friend. This doesn’t just apply to the forex market, but in all walks of business as studies have shown the value in retaining customer relationships.
Of course, there is far more to running a successful forex broker than focusing on existing clients. We have found though that this simple suggestion is often overlooked by brokers that are too focused on the growth of accounts alone. If your broker isn’t actively reaching out to current clients, we can assure you that your competitors are!
Forex Consulting Expertise – Guidance in Launching a Forex Brokerage
As forex consulting specialists, our Forex Consulting Team can assist you with the launch of a successful forex brokerage. We provide a guideline of everything needed to be successful along the way: liquidity, technology in the form of MT4/MT5 white labels, banking guidance and much more!
To get started, simply fill out our contact form so one of our specialists can have a chat or give you a call. We look forward to hearing from you!
Forex Marketing Services – 4 Easy Steps to Create an Automated Acquisition Process
Many brokers seek ways to reduce their cost of acquisition and increase their traders’ value. Creating an automated acquisition process can be a great way to both reduce the work force needed to handle sales and hence cost of acquisition and to uplift the brand which results in greater trader’s value. However, in order to convert online, a potential trader must experience an emotional process. That process must be one that both appeals to the trader’s desire and delivers on the real value of the service. Once an emotional connection is established traders must be guided on every step of the process in order to convert. Here are a few simple steps that will help you create a successful automated acquisition process:
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Process – All good outcomes start with a good action plan. Therefore, to increase online conversions you must create a thorough map that outlines all the trader’s touch points during the conversion process until they become a client.
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Story – Every purchase decision is backed by a good story. In fact, most people buy in on a story more so than the actual service. A good story is based upon potential trader’s current desires, the true functionalities of the service and works to defy any negative peceptions that may prevent potential high quality traders from converting. The more real the story is, the higher the trader value.
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Content – Quality in a must. The online world is growing more saturated every day. People are being bombarded with messages they can no longer handle. Therefore content must be both creative and provide the potential trader with real value. Getting a glimpse of value always leaves hunger for more. When used correctly, this can be a maker or a breaker of an online acquisition process.
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Sources – As with anything, the materials will have an impact on the actual outcome even if you follow the best method. Ensure you generate traffic from good media sources that provide real users that are relevant for your service. If you mix the right sources with the right content you should hit the jackpot!
Atomiq Consulting specializes in consultation & marketing services specifically designed for forex brokers. Due to our industry expertise, we can help develop a marketing funnel with proven results. Should you wish to learn more about how our team of industry experts can help boost your broker’s marketing presence, don’t hesitate to contact us.
What Are Deposit & “No Deposit” Bonuses in the Forex Market?
Deposit bonus promotions and incentives for FX traders have increased in popularity over the years. With the advent of so called “no deposit” bonus offerings, this terminology can be confusing for those new to online forex & CFD trading. Given our expertise in the world of forex trading, we’ll explain at length how to understand both deposit and “no deposit” bonuses in today’s post.
What is a Deposit Bonus When Trading Forex?
A deposit bonus is simply a credit into the trading account of a forex trader. It’s always important to read the fine print as deposit bonuses often come with certain conditions. For example, the forex broker may require that a certain number of trades are placed within a specific time period to receive the bonus.
How Does a “No Deposit” Bonus Differ from a Deposit Bonus?
A “No Deposit” bonus is quite easy to understand. This is simply a credit given to a new trader after they have filled out an account application. In most cases the client does not yet have to deposit any money to the brokerage account in order to receive the “no deposit” bonus.
The main difference between a bonus to a trading account and a “no deposit” bonus are the conditions involved. A “No Deposit” bonus has no specific trading conditions or time constraint; a new trader must simply apply for an account and upon approval the bonus is credited.
Are Forex Deposit Bonuses Illegal?
In the past years, promotions and incentives such as deposit bonuses have come under scrutiny in certain parts of the globe. In the EU, for example, deposit bonuses are no longer allowed. Many offshore jurisdictions, however, do not prohibit deposit bonuses. Nevertheless, one should always exercise caution and read the terms and conditions before attempting to receive a deposit bonus. If you require guidance in understand a specific promotion, our team can help.
Unlock the Path to Success With Our Expert Consultation and Resources
Our team of experienced FX industry consultants have established a robust network of regulated forex brokers spanning across the globe. Reach out to us today and connect with a dedicated consultant who will provide expert guidance in selecting a forex broker tailored to your specific requirements.
We eagerly await your contact and the opportunity to assist you on your trading journey!
3 Tips For Building an Effective Forex Sales Team
Due to our experience in running successful call centers, we are often asked for guidance about what’s needed to build and grow an effective sales team. There is far more to it than these 3 tips, however, they can be used as guidance for those interested in knowing what to expect.
1) Hiring an Effective Manager
Due to the hierarchical structure of not just sales, but business in general, the manager at the top will reflect the entire team performance. It’s important to look at prior experience, references, and be sold yourself on who the manager is. Some key questions to ask are: Do they know the industry? How do they motivate the team? What approach do they take to objections?
Remember that if the proper tone isn’t set from the start, or training not done effectively, the team performance will suffer, making this a crucial decision.
2) As the Saying Goes, Time is Money
Often overlooked because you can’t physically calculate it, time is a major consideration. To effectively build a team, except to dedicate a fair amount in the beginning to get the process started. Just a few of tasks that will take time are: hiring, paperwork, setting up desks, office location, training, IT set up, and purchases.
3) Having Enough Leads
Before the team is launched it’s important to have enough leads available to call. Just Imagine what will happen to morale if there were no new prospects to contact after 2 weeks?
Our Forex Call Center Offering
Because of the time commitment and costs involved in building a sales team, brokers often choose to work with our call center. Given our years of industry experience and track record, Consulting Forex is an excellent partner for outsourced call centers. To learn more about our offering, don’t hesitate to contact us.
What Does A book Mean when Trading Forex?- A Simple Definition of A Book in the FX Market
To boil it down to the simplest level, A and B book are terms that refer to how a broker handles the risk associated with the business, which is represented by all the trades currently open at the broker. Let’s consider a very basic example.
Let’s say Trader A has bought 100,000 EUR/USD while the Trader B has sold 100,000 EUR/USD. In this case, the broker faces no risk as any uptick in price on Trader A’s account, reflects a downtick in price on Trader B’s account.
Scenario
Trader A Buys 100,000 EUR/USD at 1.2140
Trader B Sells 100,000 EUR/USD at 1.2140
EUR/USD rises to 1.2240
Trader A has a net profit of 100 pips (+100 pips)
Trader B has a net loss of 100 pips (-100 pips)
Total Risk to the Broker: 100 pips – 100 pips = 0
How A Book Works
In the above example, the broker is taking on no associated risk since their risk is hedged. This is no different than having a hedged position on a trading account. In fact, a broker’s book of business is much like a trading account, the only difference being that the broker isn’t placing the orders.
In the above case, the broker has 2 choices, either to send both of the orders to their pricing providers, or not to. If it is a full A book broker, then all trades are sent to their pricing provider and the broker earns money via the spread markup.
Forex Consulting Services
We hope this outlook was helpful. If you’d like to learn more, start your own FX brokerage or require guidance on finding a broker to partner with, don’t hesitate to contact us!
Understanding Volatility Around News Events
Trading around news events is one of the most challenging and often misunderstood aspects of the forex market. The dramatic price volatility around central bank meetings, job reports, and other political events can be very enticing to those new to trading forex. This excitement will often lead to disappointment when a new trader tries to execute orders around the event, only to see their order not go through or lose significant money on a straddle play that didn’t work out.
Why Trading News Events in the Forex Market is So Difficult
During a news event all price providers (banks, hedge funds, large brokerages) reduce their liquidity or pricing availability. The reason is quite logical: it’s impossible to predict what the announcement will be. Because liquidity providers take market risk whenever they offer pricing, the best strategy is to remove the pricing until the market digets or adjusts to the news.
Let’s consider an example. Central bank announcements are often major market movers in the forex market. The reason is that interest rate levels determine the value of currencies; the higher the interest rate, the more demand for the currency. With this in mind, if a central bank raises interest rates, the currency will go up in value, if they reduce interest rates, it will drop in value.
Because the details of a central bank announcement are not known by the market, the price will immediately either rise or fall to adjust to the news. The problem is that it will be impossible to trade during this time since no bank wants to risk being on the wrong side of the market.
For example, let’s imagine GBP/USD is trading at 1.2500. As we mentioned, if interest rates go up, this will be bullish for GBP/USD. In such a situation, the British pound will go up in value. So if you want to take advantage of this market movement, you would buy. But remember, in order to buy GBP/USD someone must sell it to you. If the news is positive, who would sell? The answer is nobody, this is why the price will spike up to the next seller. For example, at 1.2650, someone might decide it’s worthwhile to sell GBP/USD. It’s from this point you can find someone to execute your buy order.
Trading around news is tricky but not impossible. If you are interested in learning more about trading the FX market, looking for a reputable broker or are interested in launching your own IB or broker business, don’t hestiate to contact our team of specialists today!
What is the Definition & Meaning of Liquidity in the Forex Market?
Investors and entrepreneurs who are new to online forex & CFD trading are often bombarded with terminology that can be intimidating at times. It’s one of the reasons we developed our Forex Trading Glossary since we found it has helped newcomers to the FX market clear up much of the confusion surrounding the lingo around forex & CFD trading.
An example of a term that can be confusing upon first glance is the phrase liquidity. As we’ll soon discover, liquidity is a service that is an essential component for any forex broker to properly operate.
The term liquidity most likely conjures up images of waterfalls, rivers or perhaps a faucet. Obviously, liquidity in the FX market has nothing to do with either plumbing or nature, although there is some correlation in the name itself, as we’ll shortly discover.
What is the Meaning of Liquidity in the Forex Market? – The Definition of Liquidity
To get started, let’s provide a simple definition of the term liquidity in the forex trading market. As you’ll soon discover, the concept of liquidity is not as intimidating as it may appear at first glance. A basic definition of liquidity is both the pricing and execution of trades in a forex broker’s trading platform.
Let’s consider a simple analogy to further help one understand the definition of liquidity in the FX market. Imagine turning on the water in your bathroom or kitchen, only to discover that the faucet is not working. Keep this image in your mind and now think of launching your favorite FX trading platform, except when you go to check the live market rates, you discover the prices aren’t moving at all. Similar to the water faucet not working, when the prices do not move in a trading platform, there is an issue with the broker’s feed, which is the responsibility of the liquidity provider to fix.
Further Understanding Liquidity in the Forex & CFD Market
In essence, liquidity refers to the price stream that is constantly being updated in your FX broker’s trading terminal. Note that liquidity isn’t limited to forex pairs but also CFDs and even crytpocurrencies. When prices aren’t moving in the a forex broker’s trading platform, as in our prior example, then the broker is most likely having a connection problem with its liquidity provider.
It’s important to emphasize that liquidity is more than just pricing; it’s also the execution of the orders you see flashing on your screen. Simply put, order execution is what happens when a trader buys or sells any forex pair, stock, or CFD.
Once the order is placed in the trading platform, it must be routed to either a bank, hedge fund, or other clearing party which are collectively known as liquidity providers. When the LP (liquidity provider) receives the trade request, known as confirmation, it is then executed and routed back to the broker. The trader, who placed the order, will then the open trade in their platform. What’s amazing is that this entire scenario described above will happen in a matter of milliseconds!
Forex Consulting Services – Your Guide to Understanding the Forex Trading Market
We hope our definition of liquidity in the forex market helped you to better understand its meaning. If you would like to explore other terms, make sure to check out our Forex Trading Glossary where we provide helpful answers for some of the most common inquiries found when trading forex.
Finally, if you are new to trading and require guidance in selecting the broker that’s right for you, make sure to reach out to our team of consultants. We are more than happy to explore your specific needs further. We look forward to hearing from you!
What is the Definition of a White Label in the Forex Trading Market?
Our team of FX consultants speak to new investors on nearly a daily basis about the nuances of trading forex & CFDs. Because many of the traders who contact us are newcomers to the world of FX trading, we are often asked for a simple way to define forex white label technology.
You may be surprised to discover that the meaning behind forex white label technology is quite simple: A forex white label can be defined as the trading software that forex brokers use to run their business. If you’ve ever logged into a live or demo forex trading account, you may not realize it, but you’ve already had experience working with a forex white label.
Understanding Forex White Label Platforms & Technology
To dig a bit deeper, the term “white label” refers to the branding, or labeling of forex trading technology. In many cases this technology may be MT4 & MT5 but there are other platforms available as well. In order to properly understand the definition of a forex white label, let’s think about where the name originated from. The term “white label” borrows its name from products that you see on the shelf of your supermarket or grocery store.
Whether it is forex trading, or any business for that matter, if you don’t market your product, then why would any customer consider buying it? As we all know, it’s important to promote any product in order to catch the eye of customers. This concept is no different when trading forex.
Taking this example further, imagine a row of canned goods at the supermarket with fancy labels. Now you stumble across one can without any branding or label on it. Let’s imagine that it’s a gray can sitting next to all the labeled products. Why would any shopper in our example choose the unbranded can over the others with fancy labels? For that matter, what would the consumer even know about what’s inside the can? The answers to these questions should help to illustrate the importance of a white label to the overall success of a forex broker.
Selecting the Best Forex White Label Provider Requires Careful Thought
White label technology is an indispensable component to any new forex brokerage; without a software platform for your clients to trade with, there is no realistic way to grow a forex brokerage business. A challenge that new forex brokerages face is to form a partnership with a reputable and financially sound white label technology provider. Similar to selecting a liquidity provider, it is important to carefully evaluate the firm you ultimately decide to partner with before launching the business.
As a final thought, the most popular white label providers have partnered with MetaTrader 4 (MT4) or MetaTrader 5 (MT5). Although MT4 and MT5 are the most recognized trading platforms in the forex trading industry, there are other forex white label software providers besides MetaQutoes to consider. If you are interested in exploring some alternatives to MT4 or MT5, we are happy to show you some options to evaluate.
Forex White Label Solutions Powered by the Forex Consulting Team
With decades of experience in the forex & CFD trading industry, the Forex Consulting team is the ideal partner to help you successfully launch your own forex white label. Not only do we provide the technology needed to successfully launch a forex white label, we can also offer you access to several liquidity providers, give assistance with the creation of a website and also provide access to a CRM backend for your end users.
To learn more about how much a forex white label costs, discover the white label trading platforms that are available for leasing, and to further explore liquidity provider options, don’t hesitate to contact us.
