Forex, also known as the foreign exchange market, is the largest and most liquid financial market globally, and it accounts for more than $3 trillion of daily transactions. Forex is open twenty-four hours a day from Sunday evening to Friday afternoon (GMT+2), except for American holidays such as Thanksgiving and Christmas, when it closes in the morning and reopens in the evening.
It can be challenging to create your own Forex broker with such a large market. Here are some of the things that you should be doing:
Establishing a legal business entity (e.g., limited liability company). Forex is considered an international business and requires an International Business Company (IBC) or International Business Address (IBA). This will make you eligible for opening bank accounts abroad and facilitate cross-border trade financing and merchant services. The IBC/IBA should be formed in one of the countries where Forex business is regulated (e.g., Belize, Cyprus). If you want to become a client of an MT4/MT5 broker, then consider opening an IBC/IBA in Cyprus.
Open a Forex trading account with a reputable currency broker. Some currency brokers are regulated, some are not. If you want to use MT4/MT5 platforms for your business, you should open an account with a regulated broker (e.g., FCA Regulated, CySEC Regulated). You can easily find out if the broker is regulated by checking the Financial Conduct Authority website or CySEC website. Your bank might require additional KYC documentation before allowing transactions involving foreign currency deposits and withdrawals, so be prepared to provide this information as well.
Forex brokers usually offer training courses that include theory and practical exercises on using their platform(s) and fundamental trading strategies. These training courses are generally free of charge and can be an excellent opportunity to learn how to trade. You can use this experience later when you start trading for your own account.
As soon as you become familiar with the Forex market and platform(s), it’s time to think about recruiting employees, which will be crucial for establishing and maintaining business relationships with your clients (e.g., financial brokers and investment companies). A good option is to hire experienced people who already work in the industry (e.g., previous office managers) because they know what person fits best in each position. They also know the common pitfalls that might arise while managing such an enterprise and thus can help avoid potential issues from the beginning. It may take some time to find the right employees, but it’s worth taking the time to do this because having efficient people in place can save you a lot of money down the line.
Invest in state-of-the-art software and equipment to provide a better service than your competitors. Try to be the best, not just good enough.
Once you have all these things in place, it’s time for promotion and marketing, so potential clients will know that your company is trustworthy and reliable. You’ll also need to open accounts with advertising channels such as Google AdWords or social media websites such as Facebook or LinkedIn, where you can advertise yourself directly to Forex professionals who are looking for brokers they can trust.
White Label Solutions to the Rescue
A white label forex brokerage is an attractive option for many looking to start their own brokerage. A white label solution (WLS) is a product offered by an established Forex broker that allows you to use their trading platform(s), liquidity, and back-office services under your own brand name. The ‘white labeling’ refers to the fact that rather than having the white-labeled company’s name on its software, it has your company’s name. The provider (e.g., FCA Regulated, CySEC Regulated) takes care of the marketing and sales activities for you. In practice, it means that your company can start trading in a few days after signing a contract with the WLS provider without spending much time developing or customizing software because the white label solution already has all the necessary infrastructure in place.
Some of the benefits of a white label solution include:
-The Forex company doesn’t need to invest a lot of money into developing and customizing the software because it’s already done. That means that you can open an account with a broker, choose a white label brokerage and start trading within a few days after opening the account. In other words, you save time, which saves a lot of money.
The company can focus on growing its business and providing excellent customer service because it doesn’t need to waste time developing software or building infrastructure. The white label solution provider takes care of everything related to trading platforms and infrastructure, leaving the Forex broker more time for other essential business activities.
– You trade under your own brand name, which helps you become recognizable in the marketplace
– You don’t have to spend additional money on marketing or advertising campaigns because the WLS provider does it for you.
It is certainly not easy to create a Forex brokerage platform, and finding the right employees requires a lot of time and effort and creating an efficient back-office trading and client management system. White label Forex broker is a valuable option for those who don’t have enough resources or time to develop their own Forex brokerage from scratch because it offers all necessary infrastructure in one package. Like with any other business, even if you choose a white label solution, you should remember that there is no guarantee that your new company will be profitable without practical marketing activities.
