5 Things to Learn before you start a Forex IB Business

Anyone can become a Forex IB in the ever-growing retail Forex market. However, becoming a successful Forex IB is not as simple as some lead you to believe. Being a Forex IB can be a great way to earn a living, but it can be overwhelming for beginners with little to no experience. Keep these things in mind to ensure you get the most out of this.

1. Make Sure You Partner with a Regulated Forex Broker

For IBs to achieve profitable growth, it is essential to partner with a reputable Forex broker who complies with regulatory guidelines. If not, they risk losing their profitability, clients, and ultimately their reputation.

The term regulated forex broker indicates that the broker’s financial activities are monitored and supervised by financial regulators, whose role is to prevent fraudulent activities and significant risks in forex trading. A regulated Forex broker ensures that the client’s privacy is protected and the disclosures of financial information are accurate.

IB partnerships with regulated brokerage firms have allowed many individuals and businesses to become stronger players in the Forex market, assuring them more confidence in expanding their IB business. Check out this AximTrade review to find out how AximTrade sets itself apart as the most regulated forex broker.

2. Learn about the types of Rebates a Forex Broker Offer

A Forex IB typically makes money by referring clients to the brokerage firm they are partnered with. The Introducing Broker agreement outlines a commission amount that the IB receives when the referred client executes a trade.

The following are the four major types of commissions an introducing broker typically receives from Forex brokers:

  • Spread share – A commission based on the volume of trade
  • PNL Share – A commission based on profits generated from introduced traders.
  • CPA – A fixed payout when referring a qualified customer.
  • Sub IB – A partner referral reward or bonus.
Some Forex brokers also offer their IBs with Rebates as a means of compensating them. Forex Rebates represent a percentage of the commission that an IB earns when a referral is made. Over time, the more active clients an IB refer to, the higher the rebates they will earn. This ensures that your Forex IB business will never run out of profit as the rebates can add up to a substantial amount over time.

3. Find out what communication channels a Forex IB can use

The internet provides businesses with a wide range of possibilities to advertise online. A website can act as a landing page for a Forex IB. They can provide content related to trading, including tips, tricks, and information about trading. Those clients could then be used to build a mailing list.

Social media is also a great way to reach potential clients. The seemingly never-ending growth of social media has presented Forex Introducing Brokers with a wealth of possibilities. It is easier than ever before for IBs to advertise their services and gain clients. In the past, IBs had to rely on their websites and massive email lists to build a solid client base. Social media, however, has revolutionized the way content can be shared. For IBs, this will ultimately be the key to their success.

Aside from groups and pages on SM platforms that are able to catch a trader’s eye, WhatsApp, Telegram, WeChat and Forums sites are also powerful tools for attracting potential clients. Forex forum sites are also an effective platform to attract potential clients, as many new traders visit trading forums to learn and get answers to their questions.

4. Identify who are the ideal clients for a Forex IB

It is of course true that all clients generated by an IB are beneficial, but some clients are more valuable than others. They are advanced traders. It can be much more rewarding to convert experienced traders into active clients than to attract new or inexperienced ones.

A trader who has been active in the market for at least one year is considered an advanced trader. These traders have typically lost money initially, modified their strategies, and become more proficient. Advanced traders tend to have higher levels of capital and a more consistent trading style, so they offer the prospect of a much longer relationship than new traders.

Newbie traders are more likely to start with much smaller deposits and be frustrated with the losses they are likely to endure during the learning process. Moreover, advanced traders typically have more contacts, including other advanced traders. Thus, the more advanced traders you convert into clients, the more profitable relationships you will be able to build and ultimately, the more clients you will have to interact with.

5. Know how to Retain Active Clients

The work is not complete once you’ve converted interested parties into customers. Remember that you will be paid for each lot traded by an active client. So, once you’ve converted a client and they’ve deposited and started trading, it’s in IB’s best interest to keep them trading as long as possible. As we discussed earlier, advanced traders are typically better active clients, since they will have a long trading career.

A Forex IB can also assist in keeping clients active for a long time. It is a great way to assist clients and keep them active by providing insightful, actionable trading analyses. Whether it’s weekly or daily trade ideas, Skype calls, or webinars, offering traders constant support is the best way to keep them interested. It is vital for Forex IB to maintain a good, professional relationship with their clients.

How to Become an Introducing Broker (IB) in Forex?

Becoming a Forex IB does not necessarily require you to spend millions of dollars on licensing, deposits, and other associated fees. The forex IB program is suitable for anyone interested in finance and has the ability to convince traders of its benefits. Remember that the professional traders of today were beginner demo leads a few years ago, and some of the established forex brokers of today were nothing more than simple networkers and IBs in the past.

In order to become an Introducing Broker (IB) in the Forex market, you have to open a Forex account first with the brokerage firm you’re partnering with and then start referring clients. Here’s a video demonstration of how to get your Partner Referral Link with AximTrade.

Having a strong online presence is also advantageous to becoming a Forex IB, for example, owning a popular website, Instagram page or YouTube channel. You will have a good chance at success as a Forex IB if you have a credible public profile such as an independent financial consultant, a successful trader, or any type of sales manager. Having relevant professional qualifications can also be beneficial.
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