The Foreign Exchange market (FX) has come along way in the past 15-20 years. What was once the domain of banks, brokers and large investment firms is now open to the man in the street. Unlike other assets classes, currencies afford investors unparalleled liquidity, 24-hour access to the market and the ability to make handsome gains. Retail FX was once compared to the "gold-rush", low if any regulation, with a few making a fortune and many not doing as well. The opportunity still exists but retail FX has grown up. Information is readily available to almost all market participants, tools that assist in money management are available as are trading strategies many of which are automated. As long there is volatility, trade volumes tend to increase year on year providing business' with constant returns.
Many would argue, that the enemy to this process has been regulation, or rather, over regulation. We certainly have seen how US brokers have dwindled as the regulators have imposed ever increasingly stringent requirements on brokers. Elsewhere, regulation has been more sensible and existing and new brokers are flourishing. The one drawback of regulation is that, in what was once a business you could start from home, now requires strategic planning an understanding of the regulatory environment and additional start up capital.
Introducing Brokers (IB's), Managed Account managers (or CTA's) have historically had a book of business that has afforded them positive attention from their brokers. Ring fencing that business and drawing the line between who owns that business has often created a conflict of interests. Meta Quotes MT4 afforded certain market participants the opportunity to form their own business in an easy manner and with the assistance of technology companies, they suddenly had a turnkey solution which protected their interests. By sourcing a white label solution from a technology partner, they were then able to further reduce startup costs and defray operating costs by outsourcing to the technology partner.
Fair Trading Technology (FTT) provides a white label solution with a difference.
A true off the shelf solution, all that is required is for the customer to select his liquidity choice, his parameters for trading and his preferred platform (FTT provides multiple solutions), and in as little as 3 weeks, the business is operational.
For a business that could return 7 figures in one year, the white label solution certainly seems a steal when one considered the start up cost from $5,000. Of course, the decision to regulate and incorporate a business are extra but even so, a well run white label brokerage typically sees a profit in its first year.
FX trading is risky. However, with Straight Through Processing (STP) that risk is substantially mitigated. STP is the direction most brokers are taking now days, but the ability to internalize the risk or a hybrid of the two remains should customers feel so compelled.
So many startup brokers start off well then require solutions that their technology partners can't fulfill. This leads to patching the concerns which inevitably cause problems. The solution is to find a technology partner that can grow with you. From the being a simple start up to being a large broker, FTT is able to walk step by step with you giving you the peace of mind that the solution is already available when you require it.
A global game, limited barriers to entry, incredible profit potential, manageable risk and a 24 hour market means that FX is an exciting place to be doing business.
By Brandon Russell, President of US Sales & Operation