Last week’s topic was an eye opener for opportunities that abound in online forex trading to all and sundry who desire to go into it. This week dwells on those who are already entrenched and are making a living or fortunes out of it. This will convince doubtful fellows who do not believe in the reality of the business.
Is online forex trading real?
This is a question I keep answering daily from a lot of readers. Have you heard of Warren Buffet – the billionaire and the man believed to be the most successful investor of the 20th Century? He is a forex mogul! To buttress this fact presently in Nigeria, either to your knowledge or not, there are forex companies around either as representatives or partners of foreign forex brokerage companies or probably indigenous firms. InstanForex is one which is common place with their adverts and promotions. InstanForex accepts local currency for deposits in further exchange to your currency of choice for deposit. InstanForex is giving away on promotion, a brand new KIA car to the best trader in an ongoing trading contest in Nigeria! Others include FXPrimus, whose Nigeria chief executive had a flourishing medical career in the United Kingdom before taking up forex, Forextime. Nigeria market presents opportunities based on our population and resources. So at your doorstep, the answer is here. Let us take a quick look at the beneficiaries of online forex trading
Traders
This could be individual traders, corporate or institutional traders or investment firms. All these trade to make profit in the market for themselves or their clients.
Banks
Banks serve as intermediary in online forex transactions. To wire money to a broker, you need a bank, which may also use intermediary banks. These banks charge Swift charges and other local charges on your account. On withdrawal too, the bank’s intermediaries charge transfer charges less the amount you wire. Banks also do engage in trading activities to beef up their earnings.
Card based companies and other alternative money operators
Apart from banks, other ways of account funding and withdrawal are available in the forex market. This could be card based such as Visa, MasterCard and other acceptable and convertible alternative money operators such as PayPal, Liberty Reserve (LR) etc. These firms earn on transaction charges as well.
The government & regulators
The government earns VAT on the bank charges. In some countries they tax your earnings. The regulatory authority which is a government parastatal issue license to operators (brokers) at a fee. They also regulate and monitor the activities of the brokers and all operators in the market. They handle issues in case of a licensed brokerage firm liquidation ensuring investors are paid back.
Brokers
These are market intermediaries who provide platform for traders. They earn commission or brokerages on your trade as it spreads. It is a wrong notion to think your broker wants you burnt out of the market. Their survival depends on you. Hence most of them who know their onions provide frequently trading tips, technical and fundamental reports to assist you in trading profitably.
Partners
These are representatives of foreign based forex firms. They may be branded with the foreign firm’s logo or may have their own brand but feed into the broker’s system for quotes. They up the spread on trades to earn their own commission. They provide employment for citizens of the country. They operate and also bring in direct or indirect foreign investment into their home countries.
Referral brokers
These earn commission (though meagre) from the main brokers and not on you or traders directly. They are sort of salesmen/marketers who source for clients for brokers in the ever increasing competitive market.
Traders/account managers
Traders/account managers are professionals who trade on fund invested in forex to earn return for themselves and ultimately for clients. They could be individuals or investment firms. The ratio of sharing is always agreed between investors and traders. Some trade to give investors a percentage return periodically as well
Trainers
Training is the starting point of this business and a good one is deserved for a successful career. It is better to have a trader (trading live account) as a trainer. A lot have lost money just reading books and watching videos without a first hand and hands-on training in this line. Probably they are running away from the cost which they do pay dearly for at the end. Trainers could be individuals or firms made up of experienced individuals in the market. They have articulated scheme to put you through and not just a hush-wash one day or two days seminar. Their services may be expensive but it is worth having.
Technical analysts/software firms
Technical analysts do market forecast based on their tools and do sell or provide market signals to willing traders. Some software firms do also sell automated trading system or specialised indicators to willing traders.