Introducing brokers play an important and often underappreciated role in the world of Forex. While more experienced traders sometimes view introducing brokers as a superfluous luxury, for new traders they’re a great source of guidance and assistance.
Why should I trade through an introducing broker?
There are a number of benefits to trading through an introducing broker. First of all you can expect to receive a lot more attention from an introducing broker than from a large brokerage with dozens or even hundreds of clients. For Forex veterans this is no big deal but new traders often need training, especially when it comes to the software they use to trade.
What other benefits can an IB offer?
Introducing brokers are also a great source of quality Forex contacts. Discussion and information sharing are fundamental parts of trading Forex; sadly for new traders it can be very difficult to mix with more experienced players. By working with a known introducing broker you immediately gain a lot of credibility.
Is it difficult to work as an introducing broker?
It’s not difficult if you meet the necessary requirements! Introducing brokers earn rebates on the trades that their clients make. Therefore a successful introducing broker is someone with access to a lot of potential traders and good networking skills. Typically introducing brokers come from the financial sector or some other area of Forex, for example someone who designs/sells Forex software.
What are some other advantages of working as an introducing broker?
Aside from the obvious monetary rewards, working as an IB affords people the opportunity to learn about Forex in a risk free environment. For this reason many introducing brokers who become traders are extremely successful right from the beginning of their trading career. Similarly, working as an IB gives them enough time to develop a range of useful contacts before they stake any capital.