Hello, I am planning to start my own brokerage and i am currently understanding how this business model work and how i could get the best technology and liquidity. I am interested to build a brokerage model that: 1- trader can start with very small lot size ( similar to Oanda) 2- Leverage 1:500 3- I could provide VPS 4- MT4 based If any has an experience with such start ups, please share us in public or in private. I found this area is full of legal and marketing pitfalls that require cautious approach. Thanks
I led on a triangular-arb project for a (now) large FX broker. This has been construed in the past as ownership in the broker (had no eq stake). I only mention this as I have some experience in the field. Forget about any US clients. I assume you know this already. Netting internally is very complex once you go to the Oanda model of one-unit minimums, which is why nobody does it. You'll have a 10% chance of making it through the first year of operation. Good luck.
I will start from 10 units minimum instead of one-unit as Oanda.. But i will permit MT4 , Hedging and higher leverage. I will provide affordable and realiable VPS on top. My business model is customized that i am sure i can make it work if i got what really suits my needs. However, i would appreciate if you share me your experience in private or here, as you wish. I heard vague and sweat words and got many documentation that makes me confused about how brokerage work. I could share with you some of these documentation and we can talk on skype for more details if you are interested. Thanks
This market is already so saturated, its a very tough proposition. You are like 10 years late to the party. Success will almost exclusivly depend on how good your marketing/sales force is. There are service providers who can set up all the tech and regulatory stuff, but getting the punters to sign up and constantly finding new ones after they blow out is the hard part. There is basically zero client retention in this sector. And how much can you realistically make off a nickle player? Not a whole lot, so you need a legion of them.
I have a different business model that i believe it could provide an advantage to potential clients. I am not playing the same game that started 10 years ago. The purposes of opening a brokerage are several such as having a better trading condition for my high volume trading system.
Forex brokerage start up cost would be really very high i guess as you need to deposit some millions of money as security deposit to get your brokerage forum regulated by the government agency, so its all for the big guys.
Currently, i believe there are many ways you can enter this arena using white label technology with less cash. However, i think the most important is to find a competitive edge in marketing and in trading conditions. I have seen solutions with under 100K excluding the regulation cost. Regulation could start in offshore destinations. the spectrum now is wide.. However, thanks for your input