How to open your own "forex" company?

Discussion in 'Forex Brokers' started by mikelkenneth, Nov 24, 2009.

  1. Hello everybody.

    I mean, how do you become a broker yourself? I have noticed, most of the brokers have the same software and all connected to the same source, what i think is cme group/nymex.

    My idea is to have a or like company, for myself mostly, and avoid being overcharged by those brokers.

    What kind of licences do you need?Money? What about europe/russia, any differences there? Where do you apply?

    I do some research, but searching "dont know what" and "dont know where" is such a waste of time

    Any ideas? Thanks.

  2. Here you go.
  3. Looks super easy, good luck!!
    No wonder there are soooo many FX dealers poping up, anyone can do it.

    Start Your Own BrokerageProducts for Starting
    Below is a list of some of the products that will help you start your brokerage:

    MT4 Bridges
    Advanced MT4-MT4 Bridges

    Would you like to start your own brokerage?
    As a financial company, you would like to start offering Forex?
    Informational Packet (.pdf)
    Detailed Business Plan Framework (.pdf)
    Start Your Own Brokerage FAQ

    Boston Technologies is working with companies such as FXCM, Gain Capital, ODL, Alpari, MIG, Interbank FX, and FXDD to create the most competitive Retail Forex business in the world. We couple the immensely popular MetaTrader4 Platform, our extensive partner network, and our own innovative technology to start organizations off with the right foundation needed to succeed in retail forex.

    If your organization is looking to diversify company assets, there is no better time then now to begin looking at the forex market. By becoming your own brokerage house and starting relationships with liquidity providers, you will be able to lower the operational costs associated with such activities.

    Here is a model to consider:
    FXCM, one of the largest brokers in United States, has over 100,000 clients. To run such a company you need about 150 employees.

    Smaller brokers on the other hand can manage up to 2000 customers with just 10 employees. One should expect to make at least 10$ per trade per customer every day. If each customer trades just 1 time daily, with 2000 customers, they are generating $20,000 a day for your business.

    What can Boston Technologies offer you?
    Boston technologies can offer any subset of the following services and products and much more. You are the owner of your own brokerage and as such you decide what you want to do and we are here to deliver it to you.

    Together with our in-house lawyers and compliance department we can create your brokerage as an US entity, a UK FSA regulated entity, a European Union regulated entity or an Off-Shore Regulated entity
    Together with our business banking relations we can provide you with an US or off-shore business banking solution in one of the top 10 banks in the world
    We can provide you with a complete trading platform bearing your company logo and name
    We can provide you with the hardware to run the platform.
    We can provide you with price feeds, news feeds and other platform inputs.
    We can install, configure, maintain and support your trading platform.
    We can provide you with a complete website with research, charting, automatic account opening, price feed, market news and other features.
    Together with our marketing partners we can provide you with customer leads
    Together with our partners we can manage your dealing desk following your risk parameters.
    We can provide you with a list of more than 25 banks and liquidity providers for FX Spot, FX Options, CFDs and Commodities
    Provide you with the software connections to the liquidity provider
    We can advise you and consult you on how to setup your business and why

    What would it take to setup a brokerage from an idea to a fully operational business?

    Setup of a legal entity: You'll want to first talk to our compliance and legal specialist. We have experience with most popular FX jurisdictions in the world and we can advise you on what you can do and how much it would cost.
    Liquidity partners and other such relationships need to be built as early as possible. Boston Technologies, together with our partners can offer such existing relationships already established.
    Technology: In today's market you need an electronic trading platform Boston Technologies can also provide. Depending on the platform you chose you need a minimum of 1 server, but 3 is recommended. We encourage you to host them in a safe, redundant, data center we can also provide you with.
    Installation of the software and configuration: We would provide this with the trading platform, the installation, the documentation, and the training videos. As well as the installation of the STP software if needed.
    Our in-house web programmers can assist you to build you're your own website and online marketing solution. We will construct and host a website with automatic demo downloads, direct deposit, legal forms, live charts, quotes, news and everything your online forex brokerage needs.
    We can help you design your trade process flow and then we can implement it for you:
    You need to be able to answer the following questions:
    Will you do Straight Through Processing (STP)?
    Where will you unload your risk?
    What types of accounts will you create for your clients?
    If you chose to be a dealing desk broker we can help you create your dealing desk, and acquire information sources. As described by our partner: "We steadily accelerated revenue improvement since beginning with [our customer] late last year, (calculated on a per lot basis) for April revenue increased by 62% above their performance before we started. The market risk we carry for this client is extremely conservative compared to their balance sheet and we will be able to further improve this number as we complete some studies of their client base and are given permission to increase VAR."
    If you decide on STP, you will need to set up STP relations with the banks. Boston Technologies can provide you with the contacts and the software to clear your trades and your risk with more then 20 liquidity providers in FX Spot, CFD , Commodities and other markets.
    BT can provide training to:
    Managers on how a brokerage makes money and how it can lose money
    IT personnel to manage MetraTrader 4 and Forex systems.
    Sales and Marketing departments.
    To Managers about offering a managed accounts solution. We can help set up a program extension to manage multiple accounts at once.
    Back office employee. You will need to determine who does what for trading, deposits, reports, account management, and dispute resolution.
    AML and Know your Customer compliance employee.
    Boston Technologies can also help you locally in your own town by helping you Setup your own office (trading and dealing desk office, phone system, internet, hiring assistance, and everything else you need)

    How long will it take?
    Total setup time from the first phone call to the first live trade in a regulated brokerage is normally 1 month. Once the contract is signed and the first payment is received we typically deliver the basic brokerage services in about 1 week. This includes company establishment, operations setup, trading platform setup, and setup of process flow. Actual times may vary based on a number of factors.
    Here are a few timelines:
    If you chose to be registered the following registration times guidelines can apply:

    FINRA Registration (4-6 months)
    Off-shore (1-2 months)
    European Union (4-6 months)
    Boston Technologies is able to deliver most of the brokerage in a record time. Here are the time-lines:

    Trading flow setup (1 week)
    Beta Testing and Training (1 week)
    Establish FX Spot liquidity from our existing providers (2 days)
    Platform delivery (1 week)
    Construction of the company client forms and procedures (2 days)
    We are offering a free 1 hour consultation in our office in the Boston Stock Exchange Building, in our office in Copenhagen in Denmark, or in our office in Midtown in Manhattan, New York.

    During that 1 hour we will evaluate the feasibility of your project, setup a project timeline, and work out the details of getting started.

    For more information on starting your own brokerage please contact us at

    Risks and Contingencies
  4. Thanks. Perfect.
  5. somehow, that seems like super overkill for someone wanting to be his own broker.

    Why not just be an introducing broker for an already established broker/FCM - openecry, IB, or many others.

  6. You are right... the Boston guys ask for 40 grand plus 3 monthly to get all the things on. Allthrough they gave me some idea how the stuff works.Thanks.
  7. This was a fantastic thread for me... I got to read something really nice in their "sample business plan"... here

    Closed loop dealing desk: The second business model is to take more of the risk: The customer buys from the broker
    and sells to the broker. If the customer makes money, trader loses money, and the contrary. Most small retail customers
    have no experience and 95% of them WILL lose money. In this model, which is more like gambling for the customer,
    most customers spend 95% of their deposits in 2-3 months.

    This model is simpler, but riskier. Here, most customers act like gamblers, and your model is to act as the “house”. If
    they start with a deposit of $10,000, because of betting psychology most end up losing 90% of that investment in 2-3
    months. They take small profits, and let losses run. Thus, this is a “non recurring” customer model, in that most
    customers lose their cash, and do not come back with additional investments. Ongoing customer acquisition is thus very

    In this model, some of the more experienced customers will grow frustrated that they are not dealing with Straight
    Through Processing. Segmenting these customers out and dealing with them through a Straight Through Processing
    model is usually a good idea. Below we discuss such hybrid models.

  8. neilboso


    It is quite easy to start trading forex. There are a great many forex brokers
    available and opening an account is pretty straightforward. Some things you should consider as you look to identify the one best suited to you are:


    Account minimum deposit (if any)

    Transaction size flexibility



    Commissions (if any)

    Security of deposited funds

    Allowable leverage

    Currency pairs available for trading

    Usability of the trading platform

    The great thing is that nowadays the vast majority of brokers have available demo trading platforms you can use to evaluate their system. Be sure, though, to make note of any differences there are between the real platform and the demo one. Some brokers' platforms are both the same across the board, but some have noticeable differences in things like execution speeds. It wouldn't hurt to check around the discussion boards to see what others are saying.

    Actually, if you are new to forex trading it is well worth it to spend a while trading via a demo platform first. It will help you develop and understanding of how it all works. That way, when you do go live, you will be more confident and ready for action.

    Easy Forex
  9. Banjo


  10. which market are you going to work on?

    if you aren't sure then it would be better for you to ask "what to do?" some software provider which can provide support of more than just forex (for ex.

    I think they will help you understand wht to do next.
    #10     Dec 17, 2009