Volatility and daily price swings are to be expected in the forex market, but long-term predictions regarding currency shifts can still be made. As such, exciting developments are expected in the coming year, with traders watching carefully for potential policy changes at the US Federal Reserve and the Bank of Japan. For anyone who wants to make the most of market shifts, choosing the right forex trading model is essential.
Exciting developments are expected in the coming year, with traders watching for policy changes at the US Federal Reserve and the Bank of Japan
Away from political matters, the forex market is set for a period of significant technological development. Social trading is expected to continue its momentum, while advanced digital infrastructure will open the market up further to smaller brokers. This will enable them to deliver platforms that boast the speed and scale that modern-day traders demand.
The regulatory landscape for forex has also shifted recently, with ESMA trading regulations coming into force for Europe-based brokers and traders in 2018. However, at FXCC, we have chosen not to bemoan this development. Instead, we believe that the newly imposed rules will not only benefit the industry, but will also help our business identify traders that require the high-quality services that has built its reputation on.
Building a platform
At FXCC, we are passionate advocates of the straight-through processing/electronic communication network (STP/ECN) trading model, which allows brokers to offer more reliable trades and more accurate pricing. We believe this is the only truly credible option for retail traders who want to operate in an environment as close to that experienced by institutional traders. Our XL account is one of the most effective trading accounts available and, dependent on certain conditions, offers zero-fee trading.
The forex market may be in a constant state of flux, but that’s exactly why traders need a broker that is trustworthy, knowledgeable and possesses the digital tools required to make trades quickly and seamlessly. Founded in 2010, FXCC boasts a dedicated team of professionals with extensive experience of the finance sector. Our customer-centric approach means that we are not only committed to our own success, but also to our clients’.
At FXCC we’ve always regarded ourselves as pioneers. Before entering the forex market as a retail broker, we conducted a number of tests, analysing the industry from every angle and researching our competitors’ business practices. There were plenty of options already available to forex retail clients back in 2010, so we asked ourselves an important question: how could we create a unique selling point? In order to come up with the right answer, we set about making the kind of service improvements that our competitors weren’t capable of. We decided to make excellence a defining part of our unique brand.
It must be remembered that while we were looking to launch a new brokerage, the global economy was still recovering from the impact of the 2008 financial crisis. It was entirely understandable that enthusiasm for a new brokerage was somewhat subdued. Nonetheless, we turned the negative financial climate into a positive. We realised that if we could claim our place in the market at such a difficult time, we could lay the foundations for a bright future.
Naturally, we decided that providing an STP/ECN model was our best route forward and the only way to provide the level of service we were demanding. While ECN trading is regarded as standard practice now, back in 2010, when we began to put the company’s launch plan together, combining ECN alongside other beneficial factors into one transparent service was not the industry norm.
Understanding the different types of forex platform is not always easy. Both the STP and ECN models are used by what is known as ‘no-dealing desk brokers’ – these are the brokers that give their clients direct access to the interbank foreign exchange market. Within this, an STP broker passes orders directly to a pool of different liquidity providers, giving clients the best possible price. The ECN model is similar but has traditionally been out of reach to the retail trader as minimum deposit amounts can be high. A hybrid model, like the one we employ at FXCC, delivers the best of both worlds.
As experienced traders, analysts and businesspeople, we knew that we didn’t necessarily have to become the largest broker in Europe. Instead, we were determined to create a bespoke, personal bureau service for discerning and demanding clients. We wanted to create a brokerage that would pass our ultimate test: one that we would be eager to trade with ourselves.
A priceless service
It has always been our intention to provide trading conditions that are as close to perfect as possible for our clients. We know forex retail trading isn’t simple – the market doesn’t reward everyone – and it can take several years to become proficient, let alone profitable. But we believe that clients should be able to trade without any concerns that their broker is trading against them, or doesn’t have their best interests at heart. Therefore, an STP/ECN model was the right and only choice for us. We’ve stayed rigidly wedded to our early principles.
With the STP/ECN model, a broker needs to retain their clients for a prolonged period of time. This loyalty can only be acquired if brokers are willing to go the extra mile for their clients. Brokers must also deliver superb account options, excellent analysis – both fundamental and technical – and make sure they are continually ready to cater to a client’s every query and request.
At FXCC, we provide our clients with access to MetaTrader software platforms, giving them all the tools they need to carry out research and easily enter and exit trades. Trading into and through an ECN, via an STP method, is still the only access route to markets by which retail clients, who may only have modest account sizes, can enjoy a trading experience similar to that of professionals trading at tier one institutions. Nothing else comes close.
Taking our bespoke service to the next level has become our primary objective. The company’s mission is to provide unparalleled levels of support and service to all our clients. Irrespective of their account size, all our clients receive equal care. We also took a view that we had to distinguish ourselves from our competitors by providing an account that had zero fees – an account where what you see is what you get. We believe that a completely transparent service, delivered through state-of-the-art platforms, is the right offer for all retail clients who are trading forex.
Our model is the only method by which traders can ensure they’re operating in a market that is devoid of interference. The prevailing market conditions are replicated by the ECN so clients can trade safe in the knowledge that they’re working in a fair environment, with no broker bias.
Never standing still
We test our business proposition by continually thinking of ways to ensure that our client base remains intact, while seeking opportunities to attract new clients to our service. As a result, we are constantly looking to improve our offering.
We’ve added various free widgets to our website for clients to use, as we believe that ongoing engagement is critical to a good client-broker relationship. Our market analysis, which we believe is second to none, is also available online. Furthermore, we keep in mind how important simplicity is when clients are looking for a broker. That’s why our XL account charges no swap fees, no markup, no commission and no deposit fees.
Client retention is the cornerstone of our business. It is one of the key metrics by which a broker’s performance can be measured. By building a relationship with our clients over many years, even when market conditions and national economies fluctuate, we have been able to achieve a high level of client loyalty.
The recent ESMA ruling, which restricted the leverage clients can use and, as a consequence, the margins required to trade, has served as a wake-up call to the retail trading industry. In our opinion, it has reinforced our belief that forex traders need to seek out brokers who offer the best value for money. With the ESMA regulations coming into force, brokers must recognise that only traders who adopt a professional attitude are likely to remain in the industry – only those with a reasonable level of account funding are likely to stay the course.
Rather than label the ESMA ruling as detrimental, we view it as a huge positive for the company and our service. Only the most prudent of brokers will continue to survive and thrive, with clients likely to move their funds to more established brokers offering the lowest transaction charges. While there have been unforeseen and indirect consequences of the ESMA ruling, they have largely been beneficial. Many of the faults that have hampered retail traders have been addressed by the new parameters. Overtrading will be reduced, and the perennial affliction of traders – attempting to trade from an undercapitalised account – should now be addressed.