Choosing which platform to offer your customers is probably one of the earliest and most pivotal decisions you can make as the founder of a new forex business.
There are only three options, and all of them have their challenges. However, there is one clear winner for a startup forex business. Read on if you would like to know more.
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Form a partnership with an unknown entity
Unfortunately, many novice brokerages opt for the free, proprietary platforms that other brokerage firms offer. They attempt some kind of partnership without realising that it is doomed to fail from the very start. It is challenging to persuade seasoned traders to switch platforms and move to an unknown one. Look at it from their perspective. Why would they trust a new platform to have the necessary security, account management and trading tools? What about data, records, and customer service? It is a complete gamble on their part and a good trader never gambles.
The second problem occurs when one party wants to separate from the other and go it alone. You can imagine the chaos that ensues over the control of the customer database.
Build a platform from scratch
Most entrepreneurs are used to the idea of going at it alone. However, this can be challenging in the forex market. Traders do not trust easily, and they are extremely suspicious of new entities, financial products and platforms promising new indicators and other trading miracles.
Admittedly most successful companies go on to create their own platforms and products but usually after years of trading and building on many successes.
Building a proprietary platform requires a significant investment of time and money. A team of engineers and infrastructure will all have to be bought. Then the software will need to be marketed exceptionally well to win over highly suspicious traders. The cost can quite quickly spiral out of control.
MetaTrader white label
The best way to minimize the risk integrated with partnering your business to the wrong firm and platform is to choose one that’s the closest thing possible to a market standard, and by joining an established company that has experience dealing with forex start-ups.
When it comes to retail Forex, the software trusted by traders all over the work is Metatrader 4, more commonly known as MT4.
MT4 provides free professional charting, access to historical data, demo or paper accounts, and it supports algorithmic trading (via “robots” or “expert advisors” [EAs])
Many companies are offering MT4 as their white-label platform because of its reliability and trustworthiness. Due to the reputation of the platform, it would be a waste of money and be downright foolish to try and sell traders something else.
From the perspective of a new brokerage, all you really need to do is pop your logo on it, learn how to use it and integrate it into your business.
It is a much cheaper way to get started, and your clientele will never know that you did not develop the software yourself.