Author:Vishal Doshi
Date:02-11-2017

How to set up a Forex trading business ?

Steps :

  1. Create your Business Version :
    • You must start a business with your money first as the risk factor is higher in investing someone else’s money and there you have a lack of experience.
    • You help out people only by sending signals at an initial stage.
    • You can start making money by selling you trading signals when you have achieved that level of confidence, when you understand the Forex market completely and when you start earning good results.
  2. Get yourself an effective Forex trading system that fulfills your need :
    • ForexPeaceArmy.com is a site that helps you to choose a suitable Forex trading business according to your personal needs, and that can make you win on a continuous basis.
    • You can find many reviews regarding trading signals[1], systems, software and even trading courses. Most of these reviews are genuine because affiliated links are not permitted.
    • You need to choose a trading system that suits your business personality and tolerance level and your level of taking risks.
  3. Find a well-experienced broker:
    • You need to search for a good broker, who can provide you a proper simulator program. Mostly simulator software is available for free, by the broker itself.
  4. Choose a business type :
    • You have to select a business type according to your need for gains and readiness to take risks of different levels.
    • You can have a sole proprietorship, a corporation or even a company.
    • Selecting a business type depends on capital you want to invest.
    • There are different tax advantages in different business types.
    • You can create a pre-made form of the corporation from Nolo.com if you wish to do one, without any legal charges.
    • You need to hire lawyers, for the opening business of setting up a corporation or opening a company, to manage all the legal paperwork on your behalf.
    • Greencompany.com helps you to start-up investment funds.
  5. Keep records :
    • You will have to maintain a record of minimum six months of both winners and losers, and show the public that you are capable enough of making them earn profits and there are people who are benefitted by your trading signals.
    • It will help you gain their confidence in you and your work.
  6. Create your website :
    • You need to create a website to advertise your work of providing service of Forex signal to traders.
    • You must take care that your website looks professional and that also allows you are hosting.
  7. Do marketing of your site :
    • You can market your website on popular search engines.
    • You can get potential customers by just opening an account in just $20.
    • Pay-per-click search engines are best to publish, advertise and market your website.
    • You will get potential customers easily and soon.

Why invest in Forex trading infrastructure?

  • According to Justin Yifu Lin, the Vice President of World Bank, who is also a top economist, said in appreciation that, India could achieve 9 to 10% of economic growth, by improving its infrastructure.India’s foreign exchange reserves are Rs.12.79 trillion.
  • Central Bank has been selling Indian equities and dollars with the help of Foreign Institutional Investors (FIIs) to protect the falling rate of the rupee.Mr.
  • Lin also recommended developing nations, to invest in government projects granting them high returns on their investments, to let government encouragement packages achieve their targets for economic growth, of the country.According to him, when the government proposes impetus packages to support a sinking economy, the public has to face the burden of higher taxes.
  • To lessen this burden public save more money, and nullifies government efforts.Also, Lin suggested India supply more money to the market and not to be afraid of inflation because inflation rates in India have decreased immensely.
  • India is now moving towards Deflation. India can increase its productivity by using its foreign reserves for infrastructure projects.In India when private sectors will be encouraged to invest in Forex infrastructure the economy will expand and absorb more money, reducing the fear of inflation. Implementation of projects plays a vital role here.Mr. Lin said this time is the best time for investing in new projects as they were expensive before two years and would not have given high returns. India can maintain gross rate at 5-6% and create new job opportunities. Also, after the crisis, India may earn a gross up to 9-10% for decades.
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Why is there a need to rejuvenate your Forex trading infrastructure?

  • Now, it is the time when FX ECNs and big investment banks are using electronic platforms for trading. Peak volumes are very high today. Latency requirements are very flexible now.
  • Now there are many sources of liquidity, much-sophisticated trading abilities, many regulations to be followed and taken care of and involvement of corporate officers.
  • In today’s Forex market, there is a need of modern techniques for multicasting price distribution, for determination of software brokers, and also live web streaming software.
  • Initially, infrastructure was very complex. Business units are now realizing that their clients have taken over the traffic bursts and are massively affecting their systems because clients completely rely on electronic media.
  • Infrastructure is not taken care of because of increasing focus on algorithms, risk management, features and regulatory compliance. The old business technique of messaging infrastructure is causing many problems for firms.
Few of them are :
  • During peaks, the system performance gets unpredictable.
  • Complexity in infrastructure makes system fragile and out aged.
  • The system cannot handle the overload.
  • Management visibility absent.
  • Power supply takes a lot of time for troubleshooting because of architectural complexity.
  • Development of new attributes is very expensive.
  • Shortcomings and complexity in infrastructure need workarounds and predictions become hard.
  • Even running the system is very expensive and not an easy task.
  • You require many software licenses and servers, and you require specialized people to run, maintain and troubleshoot the complexities with your applications in your infrastructure.
  • You need to control every area of your infrastructure, like maintaining production inventory, revising maps, keep an eye on information used and produced by your applications, their price rates, deployment status and even the use of any particular hardware and software.
  • Passing internal security audits becomes difficult in multicasting your infrastructure.
You should rejuvenate your infrastructure-
  • To see the more predictable performance.
  • To get more robust system control.
  • For better performance and utilization of WAN
  • For better troubleshoot.
  • For removing streaming failures.
  • To pass security audits easily.
  • To focus on your business applications without any hurdles of workarounds and dealing with any production problems.

Currencies used in Forex trading :

  • GBP
  • PLN
  • USD
  • EUR
  • CHF
  • LPY
  • AUD

Every other currency will get converted to you Vault currency according to the exchange rate of the transaction at that particular time.

Important Terminologies :

Introducing Broker :

A broker who in direct relationship with his or her client, but appoints another individual merchant or a firm for the work of floor operation and trading purposes are known as an “introducing broker.”

Futures :

“Futures” and “Options” are financial commodities or derivatives or financial instruments of Forex Trading Market. ‘Underlying’ derives the value of futures. This underlying can be the value of gold, stocks of a company, currency of a country, etc. You can trade futures without the underlying asset.

Futures Broker :

An individual or a firm who gives orders to buy or sell particular commodity contracts for his or her customers, is known as a “Futures Broker.” The future broker earns commission for providing this service.

What is the meaning of deposits and withdrawals in Forex Trading?

Deposits/ Funding :

  • Demand Deposits : Accounts where a customer can withdraw his or her money without any prior notice of fewer than seven days, is known as demand deposits.
  • Time Deposits : Accounts where a customer cannot withdraw his or her money without prior notice or before a set date, is known as time deposits.

Ways to deposit or fund and withdraw your FOREX.com account :

  • Debit/Credit Card
  • Sofort Banking
  • Wire Transfer

They solve withdrawal requests in next 48 hours of business working hours of receipt of the request. There are few online brokers like FXTM FXCM, NordFx, and Alpari, etc. providing facilities of deposits and withdrawals to their Forex clients. They charge according to the source of deposit or withdrawals.

For example :
  • Debit or credit card (Visa, MasterCard, Visa Electron, Visa Delta, Maestro International, Maestro UK,)
  • The UK issued debit card
  • Moneta
  • Web Money (for Russian clients)
  • China UnionPay
  • Netbanx (for Chinese clients)
  • mPay
  • FasaPay (for Indonesian clients)
  • eProtections (for Japanese clients)
  • Neteller
  • Boleto (for Brazilian clients)
  • Bank Transfer
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Benefits to becoming an IB (Introducing Broker) :

  1. In Forex trading, IB’s (introducing broker) are paid on according to the trading volume of their customers.
  2. An Introducing Broker can provide top value-added services to gain more cash-flows and earn more.
  3. He can develop a back office for more time consumption to handle upcoming trade issues for free.
  4. An IB can leverage off his present client's relationships to help their business grow.
  5. He can also earn more by diversifying client’s investments in alternative schemes based on past good reports with his customers.

Benefits to becoming an IB (Introducing Broker) in Lagos :

  1. Day by day more and more investors are taking part in Forex market. Therefore trading volumes and profits have boosted.
  2. You can get clients from all over the world with the help of a good trading platform and proper internet connection.
  3. In some cases, you do not need capital to set up your business as an introducing broker.
  4. The Central Bank is the highest authority over finances in Nigeria. According to one of its manual published in November 2006, everyone is allowed to take part in Foreign exchange market by passing through authorized dealers of registered brokerage firms or banks.
  5. Currency trading is non-regulatory in Nigeria.
  6. Forex market which is a hub for leverage trading, have very fewer regulations and restrictions in Nigeria.
  7. Nigeria has a free and open market, for its citizens interested Forex brokerage industry, to choose from diversified online brokers.
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Evolution in Forex trading in South Africa :

  • In current time zone, South Africa is developing a lot. As of now, millions of South African citizens are rich and are in search of proper sources of investment in the market to earn maximum profits.South African has not yet taken over other nations regarding economic growth, comparatively.
  • But, the nation has proved itself to be a developing nation in its real meaning. Since, 2012 South Africa has shown the world a graph of consistent progress economically, compared to past 20 years.South Africa is still new to Forex market. Many South African investors are participating in Forex trading Market, because of the fact, that they can earn money (profits) based on the power of Base currency v/s Currency of the trader from another country.
  • South African Forex works in adjustable exchange rate system. The value of RAND (South African currency) depends on demand and supply forces existing in the market, like every other commodity. This demand and supply theories are directly related to the country’s economic growth.Demand for country’s products and services are the main factor that decides its currency’s value.
  • Also, determination of demand and supply is according to the national income and economic growth of the country as its trading partners. In 2013, RAND helped 18th position in most traded currency all over the world. South Africa reports only 0.3% of daily foreign exchange turnover.
  • And, the RAND records 1.1% of daily currency trading in the world.This difference is observed because of non-residents from South Africa trade a lot out of the country. There are no virtual control restrictions for foreign traders dealing in RAND, but there are control restrictions on South African traders.
  • The exchange rate for a country will build stronger when domestic interest rate increases and attracts more foreign capital. Lesser inflation will attract foreign investors for earning a higher rate of interest on their money. The currency ZAR (R) of South Africa is holding a big value on the world scale, because of the support of many successful economic factors and mining business.
  • The weakening of Rand value will lead to a decision to lower rate of interest by the South African Reserve Bank, causing high inflation. Hence, imported goods will become expensive. Further devaluation of RAND occurs. South African government controls the limit of finance that you want to in Forex. But, this will not hinder your progress as Forex market does not demand huge capital investment to earn high profits.
  • It’s all about the correct deal at the right time in the right currency pair. While dealing in South African Forex Trading market, you will have to be extra cautious with currency understanding.Trading in South African Forex Trading Market is a lengthy game.

Is Forex Trading Legal in South Africa or not?

Forex trading is 100% legal in South Africa. But, citizens, brokers, and investors thereof are unaware of many regulations thereby. South Africa has many different laws. From 2010 moving money around in the Forex trading platform became simple and an easy task, legally, compared to past few years. In short, you just need to be careful while choosing your broker, correct software and be aware of scams and wrong investment schemes.

Can I make money in Forex Trading in Germany ?

  • Forex trading is legal in Germany.
  • Federal Financial Supervisory Authority (BaFin) handles all the financial activities in Germany.
  • BaFin is a trustworthy authority covering Forex brokers along with regulating other financial institutions like banks, insurance companies, corporations, etc.
  • BaFin has a unified regulatory system.
  • BaFin gives licenses to German brokers. It follows activities of traders as well as brokers companies in the market for the control thereby.

Financial Trading status of Germany :

In last three years, more than 67% of online trading accounts have increased in Germany. In Germany, 10% share of total financial earnings of the country comes from Forex Trading Market.Commercial companies, Hedge Funds, Authorized banks and investment management companies are all included in financial trading in Germany. Germany holds a position of a heavy national share of more than 19% of financial trading from all over the world.We can say that Germany is a progressive nation regarding economic growth, especially when it comes to Forex trading. From telephone era to computers, laptops, mobile phones, and tablets, German traders are found online on a large scale.Numerous Forex brokers are available in Germany who are 100% secured by the legal authorities. There are no security issues; one should worry about while trading in Forex with German broker.

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