Online Forex Trading Brokers
Online Forex Trading Brokers are fighting for their survival during this recession. There are too many odds against them and so they have to innovative to be ahead of the others in the field in order to survive.
The income of Forex Brokers is from the spread they charge Forex Traders. This income may not be sufficient for their high overhead costs even during the economic boom days and now with the recession it could be worst.
It is known that Forex Brokers do not like Forex Traders to make money. Because when Forex Traders make money, Forex Brokers is the one that will lose money.
In order to stay afloat, most Online Forex Trading Brokers will then trade to make extra money and at the same time they employ dealers to ensure that Forex Traders don’t make too much money.
New Online Trading Accounts Campaign
Online Forex Trading Brokers require a continuous flow of new clients in order to survive. This is because there is normally a very high turnover of trading accounts.
In order to get new clients Forex Brokers have to spend a lot of money on advertising campaigns and other promotional gimmicks. One of the most common gimmicks is to offer conditional Bonus to new trading accounts. The other method is to appoint new Introducing Brokers and Affiliates to get new trading accounts.
Costs Reduction Exercise
All Online Forex Trading Brokers are cost conscious. They have to keep their overhead costs as low as possible.
At the time of the recession staff retrenchment is one of the exercises conducted to reduce costs. The other simple exercise is the termination of Introducing Brokers.
Introducing Brokers can easily be terminated. There is no requirement of payment of compensation and the Online Forex Trading Brokers can continue to harvest the labor of the terminated Introducing Brokers.
Online Forex Trading Brokers
It is a common knowledge that Online Forex Trading Brokers have bagfuls of tricks at their disposal and the more common tricks they apply are:
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1. Price Shading and Stop Loss Tripping are the two commonly methods used by Forex Brokers to make extra money.
2. The other method is to execute orders at a higher or lower than the quoted price for those Forex Traders who open their positions on Instant Execution. This is commonly practiced when the market is volatile.
3. Appointment of Introducing Brokers, sacking them and then appoint new Introducing Brokers. Normally. This is one of the costs reduction methods applied by unethical Online Forex Trading Brokers.
Newly appointed Introducing Brokers normally will very work hard to achieve their set targets with the hope that they can earn handsomely thereafter. But they are sacked just before achieving their target or one or two months after enjoying the benefits of their hard work.
The Online Forex Trading Brokers will continue trading with the Forex Traders introduced by the Introducing Brokers without having to share the spread they charge.
4. Short changing of Affiliates is the other trick used by some Online Forex Trading Brokers. The Affiliate links are hijacked or altered.
So it is advisable for Forex Traders to choose the Online Forex Trading Brokers wisely. It is safe if you are not gullible and not easily enticed by the attractive campaigns by the unscrupulous or unethical Online Forex Trading Brokers.
