How Brokers Can Help You Grab a Share of the $4 Trillion Daily Forex Turnover
Brokers get a share of the $4trillion that circulates in the forex market every day, by charging commissions on accounts and from trading spreads that is charged on the difference between the bid and ask prices for all trades executed on their ECN and market maker platforms. This revenue model is thus dependent on the volume of trades executed by the traders, and by the number of traders on the platform. In other words, the revenue model is both volume and number dependent.
Brokers may not be able to influence the trade volume of a trader, but they can have an input in the number of traders who use a platform. A higher number of traders can offset the imbalance in revenue created by traders no generating enough volume. This is why brokers have instituted several programs in place to attract new traders.
This is why in addition to bonuses, brokers have various affiliate programs where active traders are motivated to bring in new clients for a share of the spread revenues that these new clients will generate. This is a great way for a successful trader to turn his knowledge of the market into another stream of income aside from traded profits.
If you are a trader with verifiable proof of profitable trades in the Forex market over a period of time, below is a description of a model of how this can be used to bring in new clients to your broker and make money doing so.
Step 1: Understanding the Profit Model
How does this profit model all play out? Essentially, you will be paid a percentage of the trading spreads for each currency pair traded. There are currencies with two pips, seem with 8 pips and even some with 50 pips. The trader must be familiar with what currency pairs attract what spreads. This can then be used as a benchmark for profit calculations.
Step 2: Recruitment
Recruitment will work better and faster when your successful trades are put in a verifiable format. If you use the MT4 platform, putting them in MyfxBook or FxStat.com is a good place. Your trade history can then be shared on demand with interested prospects and snapshots can be created for use on a single page sales page that can be used for marketing purposes.
Believe it or not, the craze for forex trading is stupendous and there are many retail traders who are lost and looking for direction. I have come across traders who have lost as much as $30,000 in less than 2 months. These sort of people are looking for traders with sound experience and verifiable evidence of profits made over a reasonable amount of time. Therefore if you are good at forex, why waste the opportunity to make money from these people by helping them make money?
Advertising can be done using social media, on line forums and via webinars and off line seminars (which are advertised using the print and mass media). Seminars are actually one of the best ways to recruit clients , especially if they are free or priced very marginally. The aim is to get these new traders in who will then either copy your trade methods taught in the seminars, or subscribe for trade alerts. When they trade, you get paid. Simple.
This model will only work for you if you become a good and profitable trader. If you are not one yet, continue working on it. This web site is a good place to start ramping up your knowledge.