“Mind The Gap!” – The life and times of a man on the move Episode 18
FXTraderHub goes live, I have a ‘tiring’ experience in Cyprus, Indonesia limits FX advertising, news and information takes a welcome new direction, and I do the unthinkable.
In this weekly series, I look back on what stood out, what was bemusing, amusing and interesting during my weekly travels, interesting findings within the FX industry and interaction with an ever-shrinking big wide world. This is purely observational and for your enjoyment.
Monday: Retail brokers and traders – We are here for you!
The beginning of this week signaled the coming to fruition of a very important project led by FinanceFeeds that has been in development for the past few months.
On Monday, FXTraderHub.com went live, following extensive development and testing, as a resource designed to resolve some very important matters faced by retail FX brokerages, whilst providing valuable resources for retail traders.
FinanceFeeds was established with a specific direction in mind, that being to bring together the various components of the electronic trading industry, providing detailed information on continual events and developments within platform development firms, liquidity providers, institutional prime brokerages and the brokerages themselves, thus ensuring a quality B2B information resource which gives professionals in the FX and multi-asset trading sector full transparency into important matters that help form their business decisions, as well as to take our part in forging important business relationships via private events internationally.
This, therefore, is our position as a mainstay within B2B relations, however during recent times, I have personally taken note of the commercial challenges faced by quality, regulated retail brokerages when it comes to approaching and acquiring new clients, this being an extremely costly, resource hungry and increasingly difficult necessity.
One of the main issues that appears omnipresent is the traditional method by which databases of potential clients is administered, which has in many cases resulted in tremendous ineffectiveness in approaching a relevant target audience and the consequential business cost that this has generated.
Associations with affiliate marketers, the recycling of age-old databases that have been circulated between several very similar white label brokerages and extensive media buying on generic, non FX specific sites has resulted in a 1% conversion rate, and each new live customer costing in excess of $1500 on average, only to have a lifetime value of less than three months.
As professionals in the industry that supports the entire component structure of the electronic trading business, making efficient methods of brokers being matched with the most relevant customers for a reasonable price is vital, hence FXTraderHub.com was born.
The new site aggregates automated actionable content from industry-specific websites that provide quality market information and immediate and forthcoming news events that traders rely on during their day and pushes it proactively to a current database of over 30,000 active traders which we use a custom crawler to maintain and ensure that no dormant clients are being approached.
The readership consists of active retail traders internationally who currently have live brokerage accounts with regulated firms, who will receive notifications of between 20 and 30 news events per day, all of which is of relevant interest to retail traders rather than to industry professionals.
Brokers have the opportunity to, at a very reasonable fixed price, advertise and direct clients to their account registration page by having brokerage advertisements on FXTraderHub.com which eliminates the conflict of interest between affiliate sites, brokers and traders, and maximizes the opportunity to grow your business, and helping the good quality firms in this industry grow their business and overcome ever-changing circumstances such as advertising restrictions, dry databases and affiliate marketing traps is absolutely the mantra of FinanceFeeds as a responsible resource which is here for you.
Currently the site is operational, and in the next week or so, GAIN Capital’s currency converter and an economic calendar will be added to increase engagement and provide a comprehensive service to traders and brokers.
From launch we have some very prominent firms working with us on the operational side of FXTraderHub as well as having placed their advertisements for a long term on the site.
Please feel free to contact [email protected] at any time – we are here to help.
Tuesday: Rental car’s tire is similar to an ICO – it went pop within 5 minutes
The sun is still shining on the island of Cyprus as the long, hot summer gives way to brown leaves and the skeletons of deciduous trees begin to adorn the streets of Larnaca and Limassol, thus Tuesday morning’s early landing was not subject to the forecast storms, instead requiring prescription sunglasses for the subsequent familiar journey from Larnaca airport to the retail FX brokerage hotspot of Limassol.
This time, Europcar came up trumps by giving me a brand new car – rental car agencies in Cyprus are not notorious for keeping the most modern of fleets – hence I was looking forward to an effortless drive along the reliably traffic-free 37 mile trip which equally reliably takes 45 minutes.
Just after leaving the airport, however, I heard a loud noise from the rear of the car, followed by a prolonged rumble, so I started to pull the car over to the breakdown lane just before Dromolaxia industrial park on the outskirts of Larnaca. Only when stationary and in P mode did the dashboard display the warning “check tire pressure”, some three to four minutes after said noise had begun.
Poor electronic componentry has been a bugbear of many German manufacturers since the mid 1990s however for a very much relied upon safety aid such as a tire warning – now standard on almost every car worldwide – to begin to function well after the event which it reports is rather like a Stop Loss on MetaTrader 4 coming into effect three to four minutes after a market event caused massive volatility.
The latter circumstance may be fatal to your trading account and result in potential negative balance, however the former circumstance exposes a driver to actual danger. Had I been listening at a higher volume to the audio system, maybe I would not have heard the tire fail.
Back in the early 1990s when I drove an early 1980s Jaguar XJ6 with absolutely no electronic driving aids apart from a cable-operated cruise control, it was normal for drivers to continually listen for faults or irregularities and many experienced drivers understood the mechanical components and how each part interacted with another to ensure road safety.
In today’s completely automated and zero-maintenance world, we are all far too reliant on electronic pre-warnings for everything. My own car for example will drive itself, keep itself in lane, automatically keep with the ebb and flow of traffic, navigate itself to a destination and even park itself. We have basically become users of computers rather than actual drivers, hence I do believe that it is essential for manufacturers to ensure that vital warnings are actually timely.
Imagine the furore if a trading signal had three minutes latency. I can smell the lawsuit right now. Imagine if a trade was executed slowly. I can hear the cacophony of the word ‘slippage’ being liberally applied across the internet’s trading forums, but motor manufacturers get away with retaining a prestigious reputation even when their systems are tardy to the potential safety detriment of their own customers.
Essentially I had time to draw the similarity between this tire and several ICO schemes – both blew up within five minutes of being released to the public, before I was retrieved by Europcar and given a downgrade, largely because apparently these tires are not yet available in Cyprus as the car is a brand new model.
Moral of the tale: Buy American. I always do. Especially if safety and reliability are your remit. Essentially the comprehensive laws about car safety that the US government imposes on manufacturers like Ford and GM has conditioned them to proactively seek extremely high level R&D procedure, and the consequences of getting it wrong are grave indeed.
A bit like the NFA, really…..
Wednesday: Indonesia sticks the knife in
We have seen over-zealous attempts by governments, law enforcement agencies and regulators all around the world to prevent network-based advertising for retail electronic trading firms, largely because those who do not belong in our business at all and have majored on digital marketing and affiliate advertising across various large channels on the worldwide web have effectively muddied the waters for the good quality firms.
The idle response to several (very justified) complaints by groups of traders, police departments and government ministers to Google and Facebook has been, whilst well intentioned, to take the easy route and prevent ads altogether. Belgium, for example, blocked all advertising of online trading products more than two years ago. Many others have since followed suit.
I see this more of a bete noire of principle rather than anything to worry about, largely because most retail FX firms have European operations purely for the prestige of being a bona-fide, regulated company in a top quality continental jurisdiction and then use this to market to the lively and massively buoyant Asia Pacific market via introducing brokers and partner channels, a formula which has been tremendously effective for some years.
Europe’s mainland does not have many retail traders. Britain does, but they are CFD and spread betting customers who are highly loyal to 30-year-established publicly listed home grown giants such as IG Group or Hargreaves Lansdown.
Even Saxo Bank conducts its institutional business from London, and is widely respected as a leader in the business for its connection with the world’s financial capital.
The mainland, however is somewhat different. It does not have a place on the retail capital markets stage, is mired in absurd socialist bureaucracy and is anti-business. Many brokers will quickly work this out and avoid it as a client acquisition market and adopt the aforementioned model to far greater avail.
This Wednesday, however, Indonesia decided to place restrictions on what type of advertising can be conducted with relation to leveraged derivative products on its market, which is appealing to many brokers and has had some of Russia and Asia’s big names in its capital city of Jakarta since 2003.
In June this year, Google laid out its restricted financial products policy, making it illegal to serve advertisements for binary options, Cryptocurrencies and related content (including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice, as well as aggregators and affiliates for Contracts for Difference, rolling spot FX, and financial spread betting.
From June, advertisers offering Contracts for Difference, rolling spot forex, and financial spread betting will be required to be certified by Google and certification had only been available in certain countries, with the stipulation that advertisers will need to be licensed by the relevant financial services authority in the country or countries they are targeting, ensure their ads and landing pages comply with all Google Ads policies, and comply with relevant legal requirements, including those related to complex speculative financial products.
Many APAC region nations that have free access to Google (ie everywhere except for China) had not required this, however Indonesia’s government has now managed to get in on the action and band together with this.
Since China’s communist government began to make it very difficult for IBs and representatives of overseas firms to operate within the People’s Republic by squeezing their payment channels or preventing them from displaying their firms on Baidu and other associated media channels, many Chinese market participants have looked toward operating the very same business from free market regions of South East Asia which have a large alignment with Chinese business, such as Malaysia, Thailand, Vietnam and Indonesia.
Building a pre-rapport in South East Asia has been an unofficial policy of many Chinese IBs and the brokers that serve them.
Malaysia is the number one destination, and although FX is technically not a legally recognized method of investing in Malaysia, there is a vast industry there and firms do well, and are generally left alone by the government as long as they do not create a high profile problem to the public.
Indonesia is a much lower priority for many brokers but is still an important mainstay of the retail trading sector.
Whilst in Cyprus this week, I witnessed many marketing teams convening in order to stucture their approach to the Indonesian market now that the same applies there as it does in many Western nations when it comes to advertising.
Companies such as MONEX Investindo and FXOpen have long histories of business in Indonesia and have been based there since, with Monex Investindo having around 35% of the local market. These are firms that will likely know what to do, hence it may be worth looking at their plans to navigate the new environment.
Thursday: Information is the new sales
It is encouraging to see some of the larger retail brokerages begin to establish genuine information and research teams that are not simply a bait for acquiring here today, gone tomorrow novice traders.
This week, I met with a senior market analyst within a British firm, who had recently returned from Singapore to lead a new team of research analysts for a retail brokerage with an office in London and another in Cyprus.
The idea of this is to provide genuinely interesting content, produced by professionals that have careers within international institutions such as Citigroup and Standard Chartered, in clear and detailed language.
Gone are the days of gimmicks and Walter Mitty characters littering the pages and YouTube channels of retail firms, and we are now in the age of proper information. This can only be a good thing and it is something that I am happy to be part of.
Friday: Pigs flying over an Azure blue moon
This Friday, a rarity occurred. I actually had a day off. Well, almost!
Thus, you are spared my ramblings….
Wishing you a super week ahead!