Thank you for the introduction !!
So, this is very simple, all I need to know is how I can prove that I am running a brokerage designed for the trader:
OK, so it's not that simple
How can I prove what I say is in fact happening at my brokerage. I do not want to be regulated, more and more regulating bodies are falling in line with the US, and that is death to the forex. I wish to be transparent to the trader so he can see for himself that I am on the up and up.
I have been in talks with quite a few parties regarding starting a brokerage, I am leaning towards Boston Technologies (BT) to supply me with the software and the liquidity bridge. The liquidity bridge is access to 25 banks and MM prime brokers.
I am still looking into jurisdiction.
My Idea is to run it as a true STP-ECN, meaning the liquidity providers will take on my risk, you are filled straight through to market. I do not take the other side, in fact I will even turn off the hybrid system they recommend (small accounts are filled as MM and bigger accounts are filled STP), you must understand they are approaching me as if I want to be as profitable as possible (the normal) But I am first and foremost a trader and want to help make other traders profitable. From my view, if things continue as they are, the forex will not be available to you and me within ten years, it will be barred from us so only institutional accounts can trade. Or we will be trading at such a disadvantage that no one could hope to profit within a small account (the US is already well on its way). To me the forex is the perfect setting to trade, I have traded Futures and options for 10 years, I fell in love with forex 4 years ago, if someone does not create a good brokerage that works for the trader and does not try to churn them I feel we will all lose our playing field.
I want to be viable as a brokerage. Per BT's own documentation an MM makes 10x profits over STP. So I need to make sure I create a brokerage that will be used, otherwise I will be forced to shut it down, I refuse to run a bucket-shop, I make it as STP-ECN or I shut her down.
My liquidity cost is 0.20 pips from BT. The average Eur/Usd (per month) market spread is .48 pips, last month was lower at around .40, it does change from month to month. But is usually between 0.38 and 0.52 monthly averages.
From my business model I expect I can be viable with some room for growth charging at .80 pips all pairs. So that would be a base to the end user of 1.00 (.2 plus .8) plus the market spread (between 0.38 and 0.52 normal and between 0.00 and 10.00 for extremes of highly liquid or news events with low volume).
I do not intend to lower or raise the spread depending on the deposit, that's just stupid, the trader has enough to worry about when he is starting out, when I was learning to trade I really worried about the spread, now that I am profitable it does not bother me much, so why should the little guy starting out be penalized and have an even harder time -makes no sense.
The bank I have chosen so far is HSBC, I want to be sure you can get your deposit plus profits out, any objections?
I will not be promoting in the UK and can accept UK citizens, I cannot accept US citizens but I will have a link so that they can set up offshore if they want. The best I can find is around $1000 dollars so I do not expect many US clients.
The minimum deposit is $500 US and standard accounts trade right down to Micro lots (0.01).
If you would like a segregated account you will need a larger deposit, I cannot cover the fees for segregation and give it to everyone unless I raise my spread, I don't want to do that. I don't care about segregation personally, I care about what bank I am with. For those that want segregation they can pay for it.
I will host PAMM accounts.
I want to host a collection of EAs plus my personal custom indicator plus Sive Mortens daily videos plus link back to FPA to distinguish the **** EAs and keep them from being traded by my clients, I want to do anything else that might help the trader be successful.
I will personally guarantee via video on the brokerage site that you will be able to withdraw funds and profits and that all types of scalping is welcome. As I won't be betting against you I do not have any motives to keep your funds if you are successful, I welcome ANY EA, speed scalping, arbitrage, this is actually a guarantee from BT that I have from them, so I am just passing it along.
By the way I do not intend to do IB services, I have seen that IBs have not been giving any exchange to the clients (helping them learn forex or make money otherwise on the forex) and that the whole system is being undermined by Super IBs that send some of the spread back to the client, this defeats the purpose of an IB -The way it is now an IB works his ass off to get a client interested then that client goes to a super IB to get a discount, so the IB system has fallen in my opinion.
So, I would like to know if this would be something that is desired? How could I accomplish winning your trust?
Damon Hunt