The Best Forex Brokers

The Best Forex Trading Platforms

Archive August 2018

How do forex brokers conduct business?

Forex brokers earn money by helping clients to make foreign exchange investments. The broker’s main income is based on the percentage of the commission paid by each customer after each transaction is successfully paid, So the client’s money is the lifeline of the broker. Only when the continuous flow of client funds comes, the broker can get rich rewards. It is unrealistic and dangerous to imagine that it is only of a customer in long-term period.

The work of forex brokers generally is divided into two categories: One is to find new customers and recommend foreign exchange investments to suitable investors through visits; Another type of work is to analyze the market, predict trends, and help clients develop a reasonable trading strategy. These two tasks are interdependent and indivisible, Because forex brokers’ perfect forecast level can’t be reflected in the market without the right customers. There are also suitable customers without good analysis and forecasting levels. The customer’s funds cannot be added or even lost. Customers will lose soon. Although the two jobs are separate in some companies agents , the majority of brokers are one. So the job of the broker is meticulous and trivial.

Forex broker sales process and steps

  1. Understanding of the order of foreign exchange sales activities

For the broker, it is clear that each step in the sales process is the most solid basic skill for success. Sales are not very mysterious, it has its own process, Organize every step of the work and understand that the rational sequence of each step of the work can make the work more efficient.

All the steps in the sales process are combined in sequential order, The agent must grasp his or her position during the explanation process, so that interference from the target customer can also be controlled during the conversation. Even if the customer does not accept it, the broker can self-examine afterwards for the next change.

  1. Structure of the sales process in Sales process

It contains a series of steps that include from no interest in the purchase of the buyer to satisfaction with the purchased item. Its main structure has the following processes:

  • Make customers dissatisfied with the status quo. Satisfying the status quo is not a prerequisite for sales. The basic function of sales is to quickly and accurately mine each others’ needs.
  • There are three main reasons for dissatisfaction, or feelings, or fear, or self-esteem and desire. Dissatisfaction and lack of awareness will not directly promote an important purchase.Therefore, it must be strengthened into an emotional demand.
  • Emotional demand is a kind of motivation. It is not from the outside, but mainly from the inside.So you need to make customers interested in what they buy.
  • After the interest is caused, the wish will not be automatically generated.The only way to generate aspiration is to make the customer’s heart cause fluctuations by strengthening the feelings, this will make customer feel like it is lacking.
  • The emergence of emotional needs often causes customers to stop suddenly,because being controlled by emotions will regret your later actions.At this time, the outside world needs his self-verification to prove that his choice is correct and sensible.

The above five sales processes are the sales process of general merchandise. There are also these five processes in the process of developing foreign exchange customers, but the focus of some links will change. In the invisible sales process of foreign exchange, customers will make many rejection opinions, these opinions need to be more carefully identified, and some opinions are only made by customers to cover up their ignorance. Moreover, the greater the prospective customer opinion, the more he is interested in foreign exchange investment, because there are doubts when thinking.

  1. Sales introduction skills
  • the power of listening

In the process of communicating with customers, it is not said that the broker must continually publish a macro theory, but should grasp the timing of his own speech. When you take the topic away, you should prompt the client to say more, keep the habit of listening, and let the customer think about expressing their opinions. The client will reveal his true thoughts when he speaks, which will make the interview more effective. And the psychology of the average person is like to be self-centered. The agent’s expression of listening carefully is also easier to get the other person’s goodwill, and is more able to communicate in the emotional.

  • Seize the signing opportunity

The purpose of the interview is to sign the contract. Unless the broker succeeds in facilitating the signing, any results during the meeting are void. So the broker is ready to make a deal anytime and anywhere in the conversation. From the beginning to the end of the meeting, the broker must seize the opportunity and pay attention to any signs that may lead to the signing. For example, the customer suddenly interjected such questions, “How much do I need to invest?” What procedures do I have to do?” These are good opportunities to sign up, At this time, it is necessary to take out the company’s professional contract and try to sign the contract. If it is not successful, you can continue to explain other content. Constantly trying to urge customers to sign up, no matter how many times he says “no”, the broker only needs to get a “yes”.

 

Three major foreign exchange markets

The foreign exchange market is a system for foreign exchange trading and foreign exchange speculation.The foreign exchange market refers to financial institutions such as banks, proprietary traders, and large multinational companies. A trading market connect through an intermediary or telecommunications system that buys and sells in various currencies. It can be tangible—such as a forex exchange ,it also can be an invisible—such as an interbank foreign exchange transaction traded through a telecommunications system. With the increasing electronic and networked, foreign exchange quotations, inquiries, buys, sells, deliveries, and liquidations are replaced by computer networks. So we say that the current foreign exchange market is an invisible market and a paperless market for computers.

At present, there are about 30 major foreign exchange markets in the world, which are spread across different countries and regions on all continents of the world. According to the traditional geographical division, it can be divided into three parts: Asia, Europe, North America, etc. Each market has its own fixed and unique characteristics, but all markets have commonalities. Each market is separated by distance and time, and they interact each other and are independent. Once a market is open every day, orders are passed to other foreign exchange markets, sometimes setting the tone for the opening of the next market. These foreign exchange markets are centered on the city in which they operate. and radiate to other countries and regions around them. Due to the different time zones, the foreign exchange markets are open to each other during business hours, and they are connected to each other through advanced communication equipment and computer networks. Participants in the market can trade around the world, the flow of foreign exchange funds is smooth, and the exchange rate differences between markets are extremely small, forming a unified international foreign exchange market that operates globally and operates around the clock. The three major foreign exchange markets are: Tokyo foreign exchange market, London foreign exchange market and New York foreign exchange market.

  • Tokyo foreign exchange market

The Tokyo market is Asia’s largest foreign exchange market, but it is the smallest of the three foreign exchange markets. Its market has to some extent continued the trend of the London and New York markets the previous day. In addition, during this period of time, the yen will also be affected by the Japanese economic elite’s comments on the exchange rate and the release of important data on the Japanese economy.

Traders in the Tokyo foreign exchange market are foreign exchange banks, foreign exchange economists, non-bank customers and Japanese banks. Trading time is 8:00-14:30 (Beijing time). The trading volume of the Tokyo foreign exchange market is relatively single, mainly in USD/JPY and EUR/JPY. In the transaction, the general market is relatively flat, but in the future transactions, we must pay attention to the speculative role of Japanese exporters. At this time, the yen has experienced significant fluctuations in the foreign exchange market. Example: On Wednesday, October 23, 2002, USD/JPY was suppressed in the Tokyo market and quickly fell from 1 USD = 125.26 yen to 1 USD = 124.00 yen.

  • London foreign exchange market

London foreign exchange market is the world’s old financial center. It is also the earliest place for foreign exchange trading to start. Its long history has led banks to habitually choose to trade bulk commodities during the opening hours, so the drastic fluctuation of the foreign exchange market has also begun. In other words, if investors choose to conduct foreign exchange transactions during this time period, it is a good time. The exchange rate will also be affected by the news during this time period.

  • New York foreign exchange market

The New York market rose during World War II, but it is the fastest growing financial market. Since the United States is the center of large-scale global capital flows, it has a great impact on the currency market. Some commodity transactions in the London market will wait until the opening of the New York market. As the most active foreign exchange market in the world, investors are more inclined to trade during this period in order to make more profit.

Participants in the New York foreign exchange market are branches of large commercial banks and foreign banks in the United States , famous Chinese institutions include Bank of China New York Branch and some professional forex brokers. The New York foreign exchange market is not only a domestic foreign exchange trading center, but also an important international foreign exchange market. Trading hours are from 22:00 Beijing time to 5:00 the next day. Due to the overlap between the trading hours of the New York market and the London market , the market was the most active during this period, with the largest volume of transactions and a large proportion of market volatility.

Prime time of trading

There is no foreign exchange exchange in the foreign exchange market, so there is no concept of opening and closing, it is mainly based on the normal working schedule of local people. The peak of the general transaction will appear between 9:00-17:00 on the local normal working day. Therefore, relatively speaking, the local currency is active during the trading hours of the local market. Among the three major foreign exchange markets, the London and New York market hours are the most intensive. Therefore, during the period when the two major trading markets in London and New York coincide (20:30-24:00 Beijing time in summer time), the market is most volatile, which also provides investors with greater profit opportunities for entering the market.

Non-prime time of trading

Friday: Due to some unexpected news that may occur on the weekend, in this case, the risk of trading in a position over a week is higher.

Holidays: Some banks may be closed, trading volume is light, the price fluctuations are small at this time, the profit margin is not large, it is not suitable for trading.

Weekend: The foreign exchange market will never have a strict closure, but in fact all major banks and traders are closed on weekends. The mobility on the weekend is so small that it does not offer traders many trading opportunities. When some basic news is announced on the weekend, some price changes may occur, but basically the movements of the currency pair are negligible and the trading volume is very small, which makes the execution of the transaction difficult. Therefore, the FXCM trading platform will close at 5 pm EST on Friday and reopen at 5 pm EST on Sunday.

Major event occurs: If the non-agricultural data is released and the US presidential election and the prospects for price movements are uncertain , the risk of entering the market is greater.

In the foreign exchange market, we are the smallest traders and participants. In foreign mature markets, foreign exchange trading also includes middlemen, brokerage firms, central bank international companies and some fund institutions.

Intermediary refers to the main commercial banks. In the general market, their quotes are exchange rates between currencies, and other participants in the foreign exchange market usually ask these commercial banks for the exchange rate they can provide. The brokerage company cannot directly report its own exchange rate. They pass the intermediaries’ quotes to other market participants. The brokerage company will only open the inquiry party after the determined commercial commitment. The transactions completed by the brokerage company account for 40% of the total trading volume of the foreign exchange market. International companies are often internationally renowned multinational companies with subsidiaries throughout the world. Participation in the foreign exchange market is an integral part of their international trade. Some companies also have their own foreign exchange trading rooms, specializing in foreign exchange transactions.

The current foreign exchange market can be called the global foreign exchange market, because the global time difference connects the business hours of the foreign exchange markets around the world, and can be traded without interruption. This formed a unified big market.

Approaching the forex broker

With the rapid spread of the domestic foreign exchange market and the chaotic market environment in the previous period, many investors have been gone,but they have not returned. At present, the foreign exchange market is still in a hot period. This statement is nothing wrong, because the domestic foreign exchange market has just opened. There is still huge potential for development, but it has slowly entered the stage of strength competition.

Professional matters still need professional people.

How to make a stable profit in foreign exchange investment? It doesn’t depend on the luck, it involves all aspects, including technology, strategy, risk control, and mentality. However, most investors are up for a while, and their investment is accidental. At last, there is a huge loss and there is no return. Instead of concentrating on spending money on the trading market to buy lessons and knowledge, it is better to rely on solid funds to manage the funds, then you will have a stable income and cleanliness. Therefore, professional matters still need to be handed by professional people, such as professional investment institutions or companies, asset management companies, private equity funds, etc. Although domestic institutions or companies are still relatively poor, with the development of foreign exchange investment Demand, similar investment model will be one of the important directions for the development of the follow-up market, let us wait and see!

The broker (IB) can be known as a twist belt and bridge in the foreign exchange market. He is a twist band and bridge between the platform and the customer. If there is no the broker (IB) in the platform, there will be no direct Contact and relationship between the customers and the platform. The current status of brokers (IB) and how to be a good broker (IB) is really important. With the development of the market and investors’ perception of the foreign exchange market, the requirements for brokers (IB) are getting higher and higher, what needs to be done becomes more and more, attracting customers in a single way can no longer meet market requirements.

Whatever the broker (IB) is, the following core competencies  need to be done.

  1. Expertise: He can transfer professional knowledge to investors and let them learn continuously so that they can get more profits in the market.
  2. Service: As long as the service is done well, the investors can get more information from it, there will be more customers.
  3. Profit: Investors invest in profit-oriented. If investors can get more income with the help of Forex Broker (IB), this is the most attractive place for customers.
  4. Other added value, etc.: Only utilizing these aspects comprehensively, the broker (IB) can obtain high salary in the foreign exchange market.

Job Responsibility

  1. Let customers know about financial products through the form of network, and provide investment and financial consulting for customers.
  2. Develop new markets, develop new customers, and increase customer understanding of financial products
  3. Responsible for providing customers reasonable financial advice, and formulating corresponding investment strategies.
  4. Maintain customer relationships, communicate with customers, and conduct financial services to customers.
  5. Complete the tasks and goals set by the company and the team according to the marketing plan

CCTV Securities Information Channel on IB Mode of Foreign Exchange Market

IB refer to the broker model: IB can be understood as a bond and bridge in the foreign exchange market. He is the link and bridge between the platform vendor and the customer. Without the IB, the platform vendor and the customer will lack in direct contact and relationship.

Mainstream business model of foreign IB market

In China, the IB market business model is mainly divided into three modes, including service agents, analysts agents and trade agents. The above three are also covered in foreign countries. In addition, foreign countries also have different business models.

First of all, taking analysts agents as an example, it has been developed to send signals with APP on abroad. Operating in one mode of APP does not require customer service to attract customers. Everyone can automatically search for APP and then get the trading signals to make a trade.

Secondly, it is also possible to find a better trade agent in foreign countries, because the trade records of foreign traders usually look for accountants to verify some transaction records in the past. Some domestic transactions may be fake.

Lastly, there is the big difference between the mainstream business models in the IB market at home and abroad. One model that is better in foreign countries is what we call a system. These agents are actually not in contact with customers. However, many agents in foreign countries may be at the knowledge level, then doing a relatively deep establishment and forming a customer base, forming a flow, guiding these traffic to the platform, charging a proxy fee, this way is not linked to the transaction .

According to this model, there are very few in China. The main domestic service agents are three types of agent models, analysts agents and trade-off agents. The possibility of guiding traffic is more in some media, it is rarely said to introduce traffic in a proxy mode, then let customers automatically convert on the platform. One-time account opening fee, which is relatively small.

Learn business model or thinking

The development of the domestic foreign exchange market is slightly behind for a few years compared to foreign countries, but the domestic foreign exchange market has developed rapidly. Perhaps the most important thing to learn from the foreign IB market is the risk control. At this stage, the domestic agent is too fancy for immediate benefits, such as how much commission the customer can give to the transaction. In foreign countries, it may be more focused on education, it is not linked to customer transactions, so there will be no conflict of interest. The volume of transactions is greater than before ,the greater the profit point of the customer agent. But the transaction process is very painful and very difficult.

In summary, it may be difficult in the short term. However, we must develop in this direction, and the foreign exchange market will be healthier.

What should be paid attention to by the forex broker during the transaction?

  • Private transactions without the authorization of the customer.

Brokers are on the front line of trading and often find some better trading opportunities. Some brokers worried missing opportunities to place orders without asking for customers. Although their subjective wishes are good and they want to make money for customers, this is not unwise and illegal. First of all, the broker must clarify that the funds are customers, and that they have no right to control. Even if the relationship between the two is close, they have no right to arrange the role of investors.

  • Misleading customers, frequent market entry

The main income of the broker is derived from the commission paid by the customer after entering the market. The transaction is more active, the commission is higher, so the broker’s nature is to encourage customers to trade as much as possible. But frequent transactions can easily damage the interests of customers. Because every time you enter and leave the market, customers need to pay a handling fee. Even if there is no loss, the handling fee will use the customer’s funds. And the frequent entry into the market actually means that the broker does not have a clear market view.

  •  Fear of risk, market analysis is ambiguous

The job of the broker is to analyze and forecast market trend for the client. The client decides the investment direction based on these suggestions, so the broker’s forecast largely determines the profit and loss of the client’s investment. Some brokers are afraid to take risks and not dare to make clear decisions when predicting the market. He simply list the market’s news, fundamentals and technical aspects, and the reasons for bullish bearishness , which caused confusion for customers and could not enter the market.

  • Unstable emotions affect customer mentality

In the investment, “to win without pride lose with grace” is the principle that every trader and broker must follow. Controlling emotions is really important for the broker and it will directly affect the customer’s mentality. Some brokers have increased their self-confidence after helping their clients to make profits. They are arrogant, they are not able to listen to customers’ opinions, and even obstruct customer decisions. When they lose money, they are afraid of placing orders and missed opportunities. In fact, there is no long-term victory in the transaction. As long as you are in foreign exchange, you should not think that you must be a winner. Most of the losses often occur on those who think they are successful traders and brokers.

 

What is it foreign exchange?

Foreign exchange

Foreign exchange is a creditor’s right that can be used in the balance of payments deficit held by the monetary administration (central bank, monetary authority, foreign exchange leveling fund and the Ministry of Finance) in the form of bank deposits, treasury bills, long-term and short-term government securities. In 2015, China ranked first in the world’s foreign exchange reserves. However, the United States, Japan, Germany and other countries have a large amount of private foreign exchange reserves. The country’s overall foreign exchange reserves are much higher than China’s.

Classification

By degree of restriction:

Freely convertible foreign exchange: It is usually used in international settlements and freely traded in international financial markets and used to pay off debts and debts in international finance and freely convertible to foreign currencies. For example, the US dollar, Hong Kong dollar, Canadian dollar, etc.

Limited free exchange of foreign exchange: It refers to foreign exchange that cannot be freely converted into other currencies or paid to a third country without the approval of the currency issuer. The International Monetary Fund stipulates that all currencies that have certain restrictions on international payments and transfers of funds are the subject to a limited freely convertible currency. More than half of the world’s national currencies are in limited freely convertible currencies, including the renminbi.

Accounting for foreign exchange: It is also known as liquidation of foreign exchange or bilateral foreign exchange, it refers to the foreign exchange that is charged to the designated bank accounts of both parties and cannot be converted into other currencies, and it cannot be paid to third countries.

By source:

Foreign exchange for trading, it is also known as physical trade foreign exchange. It refers to foreign exchange originating from and used in import and export trade, and it is an international payment method formed by the international circulation of goods.

Non-trade foreign exchange: It refers to all foreign exchange except for foreign exchange, that is a kind of foreign exchange that is not derived from or used for import and export trade. Such as labor foreign exchange, remittance and donation of foreign exchange.

Financial foreign exchange: It is different with foreign exchange and non-trade foreign exchange, it belongs to a kind of financial assets. Such as foreign exchange between banks, which is not derived from tangible trade or intangible trade, its also not used for tangible trade, but for the management and manipulation of various currency positions.

Effect:

  1. Improve international economic and trade development.
  2. Adjustment of international funds.
  3. It is an important part of a country’s international reserves and the main means of payment for the settlement of international debt.

Forex broker

A foreign exchange broker is an intermediary who introduces clients to foreign exchange transactions. He does not trade foreign exchange himself, he only connects foreign exchange buyers and sellers and facilitates transactions. The income of foreign exchange brokers is obtained by collecting foreign exchange trading spreads and handling fees. And they do not bear the trading risks themselves.

Work content

  1. Foreign exchange margin business expansion
  2. From the perspective of customer interests, they provide professional financial investment planning with scientific professional knowledge and technology
  3. Provide reasonable advice and suggestions to help customers avoid risk
  4. Serve and maintain stock customers and return to customers regularly.

Income calculation

In the international foreign exchange market, one standard point is $10,000, which is also the basic unit of foreign exchange trading. One point represents 10 dollars. The foreign exchange margin is traded at a magnification of 100 times. In other words, one lot can be traded for every $1,000. Let’s take a $10,000 client account as an example to measure the monthly profitability of the client’s broker. If the customer places an order for 10,000 US dollars for 2 lots and makes 3-5 transactions per day, the one-month spread yield ratio is: 0.5×10×2×3×20/ 10000=6%     0.5×10×2×5×20/ 10000=10% The broker’s spread income is 6%-10% per month. Because the trading spread is objective, we may wish to call the forex broker’s spread income a “fixed income.”

If the broker adjusts the client’s commission to 3 points, and orders 10,000 dollars for 2 hands, and 3-5 times a day, the commission income ratio for one month is: 3×10×2×3×20/ 10000=36%  3×10×2×5×20/ 10000=60%, the broker commission income is 36%-60% per month. Since it is up to the broker to choose whether to adjust the commission and adjust the amount, we may wish to refer to the commission income of the foreign exchange broker as “floating income”.Therefore, the monthly income of a foreign exchange broker is equal to 6%-60% of the total amount of client funds he introduces.

What does a successful forex broker do? How did they spend days?

Starting in the morning

If they go to work early, they will definitely get up early and go to work on time. On the way to work, they will actively think about the goals of the day. They are very excited about the work of each day because they like what they do. They believe that what they do can give people opportunities and improve their lives. Sometimes they are considering a tough potential customer, and the exciting energy has prompted them to start tracking this potential customer.

With a cup of coffee, they can grasp the main points of the financial news of the day. Undoubtedly, most people use the points prepared by internal analysts for convenience. But as a perfect forex broker, he knows the importance of details, and he thinks that the extra insight can make him more confident. The information you prepare is not necessarily related to foreign exchange . It can be a macroeconomic article, or a new trading strategy article, or a strategy to invest in retirement savings, these can provide them with a new incentive concept. This is the potential user. The difference between conversion and non-conversion.

Entering the office

When they reach the office area, they will go directly to work. But for successful forex brokers, they have already acted. In order to develop potential customers, you must enter the state at the beginning, be ready and you are ready whenever you call.

As the best forex broker, they will give priority to other people’s opinions, keep the call efficiently and follow up in time.

Lunch

They will have lunch on time, not just smoking.

Afternoon activities

They will continue to call. Some agents may be inefficient or too  much hurry with telephone, but the experienced Forex brokers can quickly ask questions to determine which customers are ready and which take longer to convert. Instead of wasting time on customers with no potential, they spend more time developing potential customers.

They spend part of their time on emails and chitchat, they can discover these potential customers and react quickly and effectively. They have a mindset of service and sales, they know when to help potential customers, when to further develop new customers.

After work

They may go to fitness, help to vent the tricky things they have encountered at work, or they will meet a few friends .When evening time, they feel they had a great day!

Trading platform

The foreign exchange trading platform refers to some independent traders with certain strength and credibility in the foreign exchange market, which constantly report the buying and selling price of the currency (two-way quotation) to the investors. The investors accept the trading requirements at the price.

The platform can hold its own funds to trade with investors. When the market transactions are scarce, the buyers and sellers do not need to wait for Co-occurrence. As long as there is a platform to take over the “opponent party” of the transaction, the transaction can be finished. In this way, an uninterrupted sale will be formed to maintain market liquidity. The general situation is a place for foreign exchange transactions.

Platform time

Opening hours of international major foreign exchange markets (Beijing time):

Wellington Forex Market, New Zealand: 04:00-12:00

Australian Foreign Exchange Market: 6:00-14:00
Tokyo Foreign Exchange Market: 08:00-14:30
Singapore Foreign Exchange Market: 09:00-16:00
London Foreign Exchange Market: 15:30-00:30
Frankfurt Foreign Exchange Market: 15:30-00:30
New York foreign exchange market: 21:00-04:00

Don’t blindly enter the market, it is best to look at the market, seize the opportunity and then place an order.