Author Topic: This will blow up your mind - - - Forex world snowden time  (Read 41 times)


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This will blow up your mind - - - Forex world snowden time
« on: June 14, 2015, 12:17:26 pm »

I just got hands on some very important information about forex brokers and how they operate I think I must share it here, I can't share on other forums especially Forex factory because obviously they will ban me (again) lol , because those shady guys work for such brokers.

Read all carefully till end.

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There are several terms going around in the market - full broker, prime broker, white label etc. Therefore I would like to clarify about each of them and their differences in detail, for a clear understanding of what we and our competitors are offering. Prices cannot be compared fairly if there is confusion about what exactly is for offer from us or from someone else.

Prime broker is the term coined by one of our competitors in order to fool people. There is no such thing as prime broker (as far as MT4 license is concerned).

Just for the sake of simplicity, just forget about everything and let’s focus only on MT4 for the time being. The confusion of white label or prime broker arises not from what kind of company or bank account or website we or anyone else is offering. This confusion arises from what is in MT4 is being offered.

MT4 has separate components –

a)      MT4 Admin

b)      MT4 Manager

c)      MT4 Client Terminal

d)     MT4 Server (Live, Demo and Backup)

e)      MT4 Datacenter


Just like you can download unlimited number of copies of MT4 Client Terminal from any broker, but you only have as many access as the number of real accounts you have with that company, you can download unlimited number of Admin or Manager Terminal as well.

When you go to Metaquotes, they give you FULL MT4 license for one time fee of $100,000 and monthly fees of $1,500.

In this license you get 1 Live, 1 demo and 1 backup server. You have access to Admin terminal and from that you can create as many manager accounts you want. You can also create unlimited client accounts from Admin or Manager terminal. You also have unlimited copies of datacenter, which is nothing but a proxy server.

This is FULL BROKER arrangement.

Unfortunately this is self contained unit. So whenever a client places the order, trade is executed, ticket number is generated but since it is isolated unit not connected to any liquidity provider, trade goes nowhere. You need a bridge to STP the trades to liquidity provider, so that trade actually enters the market.

Bridge is a proprietary software and each of companies who offers it, charges a commission per trade for providing this facility.

Now suppose you don't have $100,000 to spend, you go to Service provider, like us. So we buy full MT4 license by paying $100,000 to Metaquotes but they will give you at lower price and collect the discount they offered in long term in form of various fees/commissions. So here you have ADMIN terminal as well as manager terminal but license was bought by someone else and you are using it. Just like you can live in a rented house without paying full amount to buy it, but you can use every single feature of the house.

Metaquotes gives you for $100,000, that is lowest you can find anywhere!
However my company can provide Admin access for much lower price.
So Server will remain hosted at our systems, however you can do everything you can do as in full license for much lower price than $100,000.

Full Admin access allows you to do the following -

a) Edit Open/Closed Trades - You can change open time, close time, open price, close price, profit/loss, virtually anything. Therefore you can modify and create trading statement of any account entirely different from actual trading results. You can also transfer trade from one account to another. You can reopen closed trade etc. Many brokers use this to remove profitable trades from someone who made a lot of profit or several other ways which will be covered under demonstration and training session. Many of myfxbook and PAMM acc performance on dubious brokers owe to this trick.

b) Edit Prices and remove it after its intended effect - Brokers create spike and later on remove it from price history. Then trade is shown at out of market price and  account has already suffered margin call.

c) Stop Out Level modification - Suppose you have stop out of 10% but there is a trader howering at 12.7% for hours, you can bring trader to another group and modify Stop out level to 13% so that his trades are closed and you restore stop out level to 10% and edit comments to show that he was stopped out at right price.

d) Manager Rights - You can properly allocate manager rights. Usually manager logins are provided to your employees. So you don't want an employee who has right to open or delete accs to have rights to trade on company's acc via Risk manager/Coverage acc. That leaves possibility of him opening accounts and trading on those acc and losing money and deleting accounts. Similarly, cashier/accountant cannot have other rights which can be misused. Our employee management plan covers all these issues in depth and part of our demonstration and training section.

e) Quick Turnaround for your clients and access plugins - You don't require to email us for modifications and will have quicker turn around time while using our plugins (for example, adding someone in multi level IB structure or adding someone for Anti-scalper.

We neither recommend nor endorse any of the above behavior. Please refer to attachment which shows section where you can execute above activities.

Now coming to what you are going to get from me or any of our competitor looks similar but is radically different. Each of us will give you –

a)      Manager terminal (unlimited copies)

b)      Manager account logins/credentials (Our competitors – limited fixed number, My company – unlimited)

c)      Groups to classify traders based on STP/MM/Country etc – Our Competitors – $100/month, per group. My company – unlimited number of groups

d)     Securities – Number of instruments you can offer to your clients. Our competitors – $30 per security. My company – as many securities as MT4 permit/no limits

e)      Currency suffixes (E.g. UsdJpy+ or UsdJpy. or UsdJpy!) – Our Competitors – you have to chose from suffixes they offer. My company – you can use any suffix you want.

As you can see, my company doesn't put restrictions which our competitors does. Also, unlike our competitor, we don't put 40+ brokers on the same server.

One way to confirm this thing is ask these questions to other service providers -

a) How many symbols and securities can I have? Can I suffix whatever I like to for the symbols?
Most of my competitors will limit number of instruments you can have, as well as a monthly fee for each instrument.
b) How many groups can I have free of cost?
They would say about none. Because if somebody is servicing each broker with separate MT4 server or have fewer clients, they won't mind even if you have 10 groups. However who are giving white label, they have a hard time giving more than 10 because 10*40 (40 brokers on same server) is 400 which is big number to manage for the service provider.
Therefore all our competitors charge a fee per month for each group you have.
c) If I don't like your liquidity or have slippage etc, can you connect me to some other broker/bank free of cost?
They would not allow you to do that. They would say you have to use their liquidity in all cases. Or select on of their preferred partners. We will connect to whatever liquidity provider you wish to be integrated with.
d) How I can be sure that you are not market making me?
With us, you have Liquidity provider and Bank account under your company’s name. We are strictly service provider with no participation in management of your client’s fund. They send to you and you decide where to keep it. Other companies are like dark pool, you cannot make out whether they are actually providing STP or running B book against you.

I hope the difference is amply clear from the above, but since it is not very simple to fully understand. Therefore if I was not able to explain it correctly, I can show this over skype or teamviewer in demonstration session to better explain the difference between my solution and that of other companies.


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Please understand that business results are not reproducible because business model of one company is not similar to another for many reasons. For example -

a) A STP only company will make less money than Market Maker
b) A market maker which does slippage and requotes and sometimes produce spikes and not pay profits to big profitable traders will make more money than completely honest market maker.
c) Companies like Swissquote, FXCM where director is also a partner takes out big salary and that add into expenses and thus lower net profit.
d) Companies which are located in US or UK or 1st world countries pay more salaries and thus more expenses and revenues
e) Companies which are FCA or NFA or CySEC regulated have to spend a lot of money for compliance.
f) There are companies who buy sticky at forums for $1500 or $10,000 per month and there are companies which manage to remain on top of forum by some other way. Companies which spend on ad listing or companies which escape that by some other means. Companies which spend on google adwords or companies which get clients by mailing list.
h) Companies which has pamm accs and fraudulently display edited statements and once big investor deposits, they place rash trade = margin call.
i) Companies which provide managed acc services, companies which sell educational material, companies which have acc managers who actively guide traders to place trade which will result in margin call (iforex, xforex), companies which spike and give margin call to big depositors (Inarabia - Rs 2 crore this way), companies which promote in rural areas and and target less educated people.
j) Marketing budget. Ambit had 0 but very hardworking partners which took daily seminars and arranged Rs 2.5 crore very quickly but Mocaz had advertising budget but never bothered to arrange seminars and thus took lot more time. Ambit also has network to provide withdrawal same day, anywhere in India. Some brokers can collect cash and do wire, so if you cannot, you lose lot of business.
k) Companies like Instaforex organize so many contests, actively participate in expos, give car in prizes (from slippage money), keep on making new websites, star something innovative (for example Instaforex TV with everyday forecast several times a day).
l) FXDD has complete website to quick-launch white labels -

I hope you understand what I mean to say. There are so many variable! A company which does no innovation will suffer. A company which doesn't pays investors profit and does not employ army of fake posters posting for $0.1 per post to suppress every bad report on every forum will do lot better than who don't pay profit and does nothing about it.

I don't have any idea what you want to do from the above and income vary drastically based on above.
So I will provide you Company, their business model and net income. Based on that you can gauge your possible income. Otherwise we discuss your business model from above points and I can project most accurate number.
So have collected Financial report of many companies but companies which actually fit as per the SMART criteria are Avafx, FxPro, Hotforex

Swissquote -  pure stp -
I guess you are not planning to run pure STP and swissquote pays a lot of salary (because of being located in first world country, highly regulated, don't have anything common to your business model.

Still slip the orders asymmetrically in favor of broker -
And paid over $5 million in fine so far

FXCM - They deleted their earlier financial statements. That average was 6.7% of client deposit per quarter.
As per, it is 3.9% (because of $2 million fine + IPO)
They are market makers but do it very aggressively and pay out profits.

Brokers which are closest to your business -

1) Avafx -
It had 16.7% profit in one quarter and almost half of it in next. Average of it is 12.45% of client deposit per quarter!
Presently they have $50 million reported client deposit (real could be much more, all brokers under report, nobody wants to say I make $6 million each quarter by market making).

But Avafx is not the smartest. They spent over $3 million in advertising in 1 quarter, don't have seminars, don't have multi level IBs, don't send signals, don't offer all deposit methods.

2) FxPro -
40 million cutomer deposit and net revenue of 26.55 = 16.6% of client deposit per quarter

It again matches 16.7% profit of Avafx (which is best profit Avafx reported) and FxPro reported this profit before IPO (so they want to report maximum profit).

3) Hotforex - You will not find this record anywhere because it is straight from their own internal mails.
1st 5 months - $0.35 mln client deposit
Next 1 year - $15.7 million client deposit
Next 8 months - $20 million
Marketing budget - $7k !!!!!!!

That is their annual budget is less than $100k. They market it SMARTLY.
Net profit - 19% of client deposit and monthly net (deposit - withdrawal) = $3mln+

4) Instaforex - This one collects more money from India, Malayasia than any other broker. Reason? There are so many. They offer bonus, 2 pip commission, bonus to IB, so many contests, so many sub websites, all payment gateways with automatic deposit, very innovative and come up with new things all the time.

5) Mayzus - He started Liteforex in 2006 for $100k. Then started Instaforex in 2008.
He ran several brokers in between which ran away when deposit grew. Then started /UWCFX for 2.5 million euros.

6) Some tricks brokers use -

Conclusion -
a) Of all my reseach Hotforex is definitely smartest in using online promotion. 19% is most I have found anyone making.
b) 16.7% of client deposit is 2nd highest market making profit I ever came across.
c) For MM, average is 12% of client deposit per quarter. You cant do lower than this unless you are not having enough staff and following policies to segregate traders actively.
b) For STP, average profit is 4% without any slipppage and 7% with requotes and slippage.

So 4% STP with no slippage, 7% STP with slippage,
12% MM on average and 16.7% at best.

All figures are % of client deposit per quarter.

And if you want to sell off business, you receive it at 40-50% of client deposit (usually half immediately and remaining half in next 1.5 to 2 years)

For example, $10 mln client base, you will receive $4 million ($2 mln in cash and remaining $2 mln as share of revenue for next 1-2 years).
Amount that be recovered after a year is based on client base. For example -
Case 1 - $73 million client base sold for $35 million
Case 2 - $32 million client base sold for $8 million + 15% of revenue in next 1.5 years

Both cases deal is 50% of client deposit as premium paid for acquiring. If the company has a total client deposit of $ 1 million then everything can be sold for minimum of 40% (that is $400,000).


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Trading Platforms –
All our trading platforms are synched. Therefore, as soon as trader places a trade in one trading platform, it automatically gets reflected in rest of the trading platform as well.
Webtrader – Using webtrader, clients can place trade directly from browser. This is specially useful as clients can trade not only from their home/offer work station but also from café or public library etc. Furtherfore, webtrader is inbuilt into client’s member area, therefore, client has to log into just one window to trade or access/edit his details, make deposit or withdrawals etc.
Mobile trader – We provide browser based generic mobile trader as our standard solution. Clients can open the mobile trader website and trade from his mobile, android, ipad or iphone. He can save site as icon so that, when its clicked, mobile trader is automatically opened.
Our mobile trader is simple, light and easy to use and does provide rates, various order types which is generally what most traders access over mobile device.
MAM – Multi Account Manager is our state of art trading platform for fund managers. Metaquotes also provide MAM, called MutiTerminal at price of $15,000 and $750 per month. Our MAM is far advanced than MultiTerminal because MultiTerminal places order sequentially, whereas we send order to all sub accounts in parallel. For example Fund Manager Acc A sends order to 100 sub accounts, MultiTerminal will send order to 1st account and once it is executed, it send to 2nd account and so on. Therefore, even though all accounts area managed by single fund manager, accounts will show same trade executed at different prices.
Furthermore, our MAM has many options about how fund manager wants to distribute trades amongst his subaccounts, rather than MultiTerminal’s standard trade distribution as per total account balance or free margin
Plug-ins –
1)      Coverage Plug-in – This plug-in displays all A book trades and all B book trades of all real traders in 2 separate accounts. Therefore you can login to one single account, let’s say account number 5, and see what is total closed and floating, profit or loss of all the Market Made traders. It is exceptionally useful in managing company’s risk.
2)      Web Registration Plug-in – It makes job lot easier for broker by opening accounts for users automatically, just by filling and submitting form on the website, instead of looking up details of each form and opening accounts manually.
3)      Commission Plug-in – This plug-in automatically adds commission charged by our company for each trade, in MM or STP group immediately after trade is closed. This plug-in allows Broker to monitor and pay our fees on time without any disputes.
4)      Bridge – MT4 is self contained unit. So whenever a client places the order, trade is executed, ticket number is generated but since it is isolated unit not connected to any liquidity provider, trade goes nowhere. You need a bridge to STP the trades to liquidity provider, so that trade actually enters the market.

Our bridge does precisely the same. It is our proprietary software which connects MT4 to banks and brokers. So all the trades of clients in STP group will be automatically routed to Liquidity provider, executed and then order confirmation message is displayed to Client.
We charge $16/mln round turn for all trades STPed but unlike our competitors we don’t have any monthly minimum. If you want to buy bridge, we would install to your server, henceforth, you won’t have to pay any commission ever and can use as many liquidity providers you wish to.
Optional Plug-ins –
1)      Bonus Plug-in – It protects broker from traders who lose their principal and trade on bonus amount. For example, Broker offers 50% bonus and a trader opens account of $1000, so Traders account has $1500. Now if trader start to trade and lose money, if his opened positions shows floating loss of $1000, he will automatically receive margin call and removes bonus so that he will not lose $500 bonus which company has offered him.
Generally, bonus given by brokers are available for withdrawal after trader has traded a certain number of lots, but  it is a bad idea to allow traders to trade on bonus, once they have lost their entire principal.
Therefore Bonus Plug-in helps in auto crediting bonus to every deposit or new deposit (whatever scheme broker has in offer), and manage margin calls for traders to ensure that broker will not lose offered bonus.
2)      Multi Level IB Commission Plug-in – MT4 allows Broker to offer commission to direct referrer’s only, however, this plug-in can not only pay commission to IB, but to referrer of IB and son on, upto 10 levels. For example, 1st level commission of 0.5 pip, 2nd level commission like 0.2 pip and so on. Commission can be earned in pip, money , % of spreads
3)      Swapfree Plug-in – Normally, there is swap charge for each trader. But in islamic law, no interest should be charged. Therefore, these clients normally request no-swap accounts. In order to setup swap or swapfree on MT4, Broker have to place clients in many diffrent groups. This plug-in allows trader to use same currency pair but will override Group’s setting in MT4. Therefore, with plug-in, Broker can enable swap free to any trader of any group on fly, without making zillions of groups for each trader with different trading conditions who demand swap free account as well.
4)      Anti scalper –This plug-in is very useful in market making (B Book) and prevent Scalper, HFT and , Arbitrage traders from bankrupting company’s profit.
5)      Auto Rebate – This plug-in automatically gives rebate to clients immediately after they closed the trade. It can credit rebate as pip or $ per lot, depending on setting for that client and each client can have separate setting. This plug-in allows you to provide lower spread to someone who will have same trading conditions as rest of the traders of a group, but lower spreads. So this way can lower spread for a particular trader, without changing for entire group. Normally, you have to create a new group for each different spread type you want to offer
6) Leverage Checker Plugin - This plug-in will automatically change leverage, as the account equity changes. So let's say you set the rule that $10,000 to $25,000 would have 1:200 leverage and $25,000 to $50,000 will have 1:100 leverage, as soon as account balance goes above $25,000, leverage of the account is changed to 1:100. So you don't have to constantly monitor the client balance in order to change their leverage. Also, you ensure that your company doesn't have too much exposure (for example an account with $100,000 trading at 1:1000 leverage can single handedly bankrupt a broker startup, if he is being B Booked by the broker and makes significant profit).
Payment gateways –
Already Integrated – Following gateways are already integrated and readily available. All broker needs to do is open account at these locations and get account approved by providing requisite documentations. We handle this part to large extent –
1)      Bank wire
2)      Skrill / Moneybookers
3)      Payza / Alertpay
4)      Credit Card (via Allied Wallet, Credorax, BillPro,, AsTech, RadiantPay, RegularPay)
5)      Paypal
6)      Neteller
7)      Webmoney
8 )      Check
Additional Payment Gateways – If a payment gateway is not mentioned above, we can integrate it as well for additional fee. Please not that paymet gateway integration is not just opening account at payment processor and adding a form in member area, but it requires changes in admin as well as member area to allow automatic deposit and withdrawal, and API integration with Paymet Processor to do so.
We can also integrate bitcoin and other coins via several valet/merchant account providers at
Please let me know if you have any questions etc.