Can we really build better forex brokers?

[AsstModerator]

There is an old thread called "Can we build a better broker?" There were some great ideas posted on improving how forex brokers work.

I made one mistake with the original thread. It was created because one FPA member wanted to create a new brokerage. He was very active in the thread. Later, problems happened. The old thread was mostly revolving around one company. This makes the chances of further meaningful discussion of how to build a better broker or improve existing brokers in that thread much more difficult.

Because of this, I am restarting the discussion, but with some new rules added.

1. This thread is not about any one broker. It is for developing plans to build better brokers or improve existing brokers.

2. If you want to build a forex broker company yourself, use "Contact Us" and select General. Send a message declaring your intentions. I'll let you know where to start a new thread for your company. Once you have started it, you may make 1 post in this thread declaring your intentions and linking to the discussion thread you created.

3. If you represent an existing broker and want to incorporate one or more ideas from here, start by using "Contact Us. As above, I'll tell you where to put your own thread on the subject. Once you've created it, you can make 1 post in this thread linking to your discussion thread.

These rules are intended to keep this thread solely focused on improving the business model for forex brokers. This way the new thread can continue uninterrupted no matter what happens to any one broker.

I'll end with the last sentence from my first post in the old thread...

Is it possible to build a better broker or is it an impossible dream? Ask, watch, and find out.

 

[ilearn2t]

Hello AsstModerator

I believe with the co-operation of all genuine brokers it could be possible to build a better forex model.

Regulated by an independent monitoring commission, put in place by the government to which the brokerage firm sets up "headquarters", to oversee the legitimate and proper running of day to day trading, only answerable to court law of each country the broker eligibility holds their business in.

Clients pay a "bounty" towards the upkeep of "said" broker, in the form of one or two extra pips on execution.

Bounty held independent of any brokerage accounts.

Bounty can be used for things like proper "well" trained employees (not like one or two buckshop brokers I know), proper insurance funding any major lawsuits/losses overlooked by "experts" etc.

Every genuine brokerage firm could be involved, by agreeing to the special rules put in place by all parties concerned.

Just think:

All IMC (independent monitoring commission) brokers listed under one roof, namely this forum.

1) No more fake "review" sites.
2) No need for IB or affiliate programs.
3) No need for "Rebate" programs.
4) No need for commercial EA vendors/programmers.
5) No need for advertising by brokers.
6) No more useless "Regulators"
7) No more fake "Account Managers"

All IMC's must agree to have their own thread on this forum and employee one or more members of staff to check on a daily bases.

All traders with issues will continue as normal (reporting problems), and if no agreement is reached within a given time period set out by the independent monitoring commission, a ruling will be given by the "said" commission.

All outstanding non-settled cases against any broker in the "Scam folder" will play a major factor when it comes to applying for membership to the IMC brokerage agreement.

Each broker will still be able to promote through their own thread on this forum, without wasting money elsewhere.

Good luck
Liz

 

[Pharaoh]

I think the goals as expressed by Liz have possibilities. Brokers will disagree with some of them.

One huge problem is that the very things that lead to the most problems and complaints are the things that lure in the most clients.

1. Instant signup and start trading. Some people just want to dive in head first. Bucketshops love traders like this, since they are typically faster than average in blowing their accounts. Even legitimate brokers want them, since they'll generate some broker profits from spreads before the margin call happens.

The problem? Anyone who is profitable has to submit their ID documents afterwards. Even a good broker make reject some documents and require expensive verification procedures. The client will automatically consider this to be an attempt to block withdrawals.

I recommend that traders NEVER deposit a cent until all documents are verified. I wish all brokers would adopt this as a policy, but I doubt that many are willing to do so. The loss of potential clients to competitors is too great for some to handle.

2. Bonuses. Brokers don't make money by giving away money. The make money by luring in more money. Any "give aways" are tightly tied with many attached strings. These inevitably lead to conflicts. In some cases, traders or groups of traders really do cheat, trying to use high leverage trades hedged between accounts to move the bonuses all to one account. In other cases, perfectly innocent traders (who may or may not know each other) fall afoul of the terms, or are just accused of breaking the terms with no evidence provided.

Dumping BS marketing tactics would save brokers a lot of headaches, but would cost them many potential clients.

3. IBs and rebate IBs. These people bring a lot of business. Sadly, many traders aren't very good at math. Many good (or potentially good) brokers have to resort to this sort of marketing to get enough clients. Then, sooner or later, some IB intentionally or unintentionally draws the broker's attention and there's a big argument about which one is trying to steal from the other.

Personally, if I know I'm getting the lowest possible spreads and commissions, why should I expect to also get a rebate?

 

[Sorin Mircea]

Not an easy task to achieve but you guys are giving some key issues and some solution.

But after all actually doing it and crating a batter broker is a totally different thing.

So it should get to the people who are really going to be brokers for them to notice this.