What a forex dealer could do right now -- with not very much effort -- to capture a huge market share.
The red underlined text below is not clickable. I just did the color and the underlining to make a few points more clearly.
- Let me see, in real time, how many traders are profitable over the last month, 6 months, and year.
- Put two or three webcams in the office and link to them from the home page.
- Do a video interview with the CEO, the CFO, and the chief tech guy on a monthly basis, talking about the business, trade volume, what trends they see, and general (but useful) advice to traders. Put a face on the management of the firm. People ought to be able to know you by name if they are going to send you their money.
- Publish out in the open how much compensation the executive team receives as a percentage of net revenues. Excessive compensation is a sign, to me, that the owner is sucking dry a business that is capital intensive -- you don't want the CEO running off with the money the firm will need in order to survive a huge move in the market (think August 2007 or December 2006 when the carry trade blew up).
- If you are a "no dealing desk" broker, then show me proof. Publish an audited record of offset trades on a monthly basis. Include in the report how much time lapsed between retail trade and offset in the market for mini or micro-mini lots.
- Publish the firm's audited balance sheet every month. On the home page. We want to know you are solvent. And we aren't going to take your word for it.
- Publish a site where the management team can blog (NFA regulations probably prohibit this on the firm's regular, main site, but would not prohibit it on an educational site owned by the firm).
- If you claim to put trader's money in "separate," "segregated," or "personal" accounts, then show the trader proof of where his money is. Let him call the bank with an account number. Most dealers who make claims that "your money is in a Wells Fargo/Citibank/Bank of America account that is yours" are lying. Period.
- Open the office two times per month for open visits and a trader open house. Have a member of the management team welcome the traders and show them around for 30 minutes.
- Let traders trade the US Dollar Index. Any major bank can provide a sizeable broker (more than 50 billion in volume) with this product.
- Become a bank. Give traders an account, a checkbook, a debit card, online bill pay. This account can be separate, of course, from the trading account, but they can be linked.
- Be more fun. Let your employees have a personality and decorate the office. Happy employees make happy customers.
These suggestions would lead to a massive increase in trading volume. All of these suggestions except for the last deal with trust and transparency. Trust is the number one issue in forex still today -- after all these years, not one forex dealer has really come out in the open.
I've got one more big recommendation -- my favorite, in fact -- but I am keeping it secret for now while I talk to a broker about a huge project. I hope to be able to tell you more about it in the next 30 days.
