Broker forex introducing
An Introducing Broker IB is essentially an agent which introduces new customers to a Forex brokerage. In return for sending custom to a brokerage, the Introducing Broker receives a fee, when it comes to Forex this is normally a certain share of the Spread or Commission charged by the brokerage. A significant percentage of brokerages, run IB programs as it can significantly reduce the costs involved in acquiring new customers with marketing efforts being left to companies and individuals who are working on a commission only basis.
In certain countries, it is required by law that Introducing Brokerages be regulated entities. This is the case in the United States, where Introducing Brokers are required to be registered with the NFA in order to be able to solicit the business of US residents.
Though the prospective IB may have to go through a vetting process and will additionally be required to provide identification and documents to verify they are who they say.
Introducing Brokers earn commission based on the volume traded by their customers, which means they want their traders to be successful ensuring that they continue to earn commission.
This means that many IB will give free gifts to those who have opened trading accounts under them.
What is an Introducing Broker? | Forex - The FX View
These gifts often vary significantly but it is not uncommon for Introducing Brokers to give traders premium Expert Advisors, books and other trading resources, all in an effort to keep traders trading with them. Additionally, many Introducing Brokerages offer rebates to their customers. Essentially, these Introducing Brokers share a percentage of a commission they make with those who choose to sign up under them.
Introducing Broker Program | Forex and CFD Trading | GAIN Capital
For many traders, the fact that they can receive rebates is one of the primary reasons that they sign up under an Introducing Broker IB , as overtime these rebates can add up to a significant amount. Introducing Brokers are often given a significant amount of information regarding those who sign up underneath them, as this gives the opportunity for an Introducing Broker to build up a relationship with their clients.
This may be a small price to pay, in return for rebates or the opportunity to get access to premium resources for free. Many are slightly confused regarding the difference between a Forex affiliate and an IB. As previously mentioned, Introducing Brokers are given significant amounts of information regarding their referrals and are often expected to foster relationships with those clients. An affiliate, however will receive little if any details regarding the activities of those who signed up underneath their affiliate link.
This leaves the brokerage itself as the one responsible for fostering a relationship with the client, with the affiliate simply attracting business.
This often means it is much easier to become an affiliate than an Introducing Broker, as a brokerage has to do less to check the suitability of the person promoting the brokerage.
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Introducing Brokers and Forex An Introducing Broker IB is essentially an agent which introduces new customers to a Forex brokerage. Benefits of Using An Introducing Broker Introducing Brokers earn commission based on the volume traded by their customers, which means they want their traders to be successful ensuring that they continue to earn commission.
Disadvantages of Using An Introducing Broker Introducing Brokers are often given a significant amount of information regarding those who sign up underneath them, as this gives the opportunity for an Introducing Broker to build up a relationship with their clients. Difference between an Introducing Broker and Forex Affiliate Many are slightly confused regarding the difference between a Forex affiliate and an IB.
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