How to become a crypto broker

Scammers do target brokers and you need to take this into consideration.

Actual forex bonuses

How to be a Bitcoin Broker; Make Money, how to become a crypto broker.

When you take payment using a method through which payments can be reversed or cancelled, and in return for bitcoins whose transactions cannot be reversed, you are taking a risk. A customer may try to reverse a payment themselves in order to get free coins (which you can usually challenge) or they may be a criminal who pays you with a hacked account, in which case the payment processor themselves may reverse it. Being licensed usually means that you need to comply with certain requirements, such as taking the personal details of clients and keeping records for a certain amount of time.

How to be a bitcoin broker & make money

Owner, editor, and lead writer for cryptorials.

Cryptocurrency writer and trader since 2014.

Many people who get hooked on digital currency become so passionate about the subject that they want to change their entire career to work in this industry. Of course there are many different ways you can go about doing that, but one of the most accessible and profitable career choices is to set yourself up as a bitcoin broker.

Becoming a broker does require you to have some capital behind you, but if you are willing to start small in your spare time and build your business up gradually this shouldn’t be a stumbling block for most people – if you have enough to buy or sell a bitcoin or two for your first trade then this may well be enough to get started. Of course if you have more than that, then things will be a lot easier for you.

The risks of being a bitcoin broker

There are three main risks associated with becoming a bitcoin broker: the risk of being scammed, the risk of breaking the law or contravening regulations and getting prosecuted, and the risk of losing money due to fluctuating exchange rates.

Compliance: do you need a license to be bitcoin broker?

Whether or not you need to obtain a license to legally operate as a bitcoin broker is something of a disputed question. It will also depend on the legal jurisdiction in which you are operating (which includes the location of your clients as well as your own). The safest course of action for anybody considering getting into this business is to consult a legal adviser who can give you expert guidance.

If you live in the united states, for example, it is usually recommended that you obtain a ‘money transmitter license’, but with little legal precedent and regulators in individual states taking differing positions, the situation is still unclear. In many other countries, such as the UK for example, the situation is even less clear, as the government is taking a ‘wait and see approach’ to regulation; this usually means that people do not bother to get a license.

Being licensed usually means that you need to comply with certain requirements, such as taking the personal details of clients and keeping records for a certain amount of time.

Even in countries like the US where certain authorities state that digital currency brokerages do need a license, many trades take places on peer-to-peer websites; since ordinary users are free to buy and sell coins without registering as a business, this creates a blurred line for solo traders who are just testing the waters to get started – at which point do you cross the line from being a regular user buying and selling with other users, to becoming a brokerage business that needs to be registered? There is no hard and fast answer to questions like that and you will have to determine for yourself whether your activities may have crossed this blurred line and what your appetite for risking prosecution and fines may be.

Don’t get scammed

Scammers do target brokers and you need to take this into consideration. When you take payment using a method through which payments can be reversed or cancelled, and in return for bitcoins whose transactions cannot be reversed, you are taking a risk. A customer may try to reverse a payment themselves in order to get free coins (which you can usually challenge) or they may be a criminal who pays you with a hacked account, in which case the payment processor themselves may reverse it.

To mitigate against this you need to be well versed in the policies for each of the payment methods you choose to accept and make sure that your prices reflect the comparative risk that you are taking. You can also reduce your risk by requiring ID verification from customers.

Reducing currency risk

A broker is often ready to either buy or sell at any time, taking a profit from the difference between bid and ask prices. This does mean, however, than you risk losing money if the price changes significantly. For example, if you buy bitcoin with the intention of selling it, then the price falls by 20%, then it is highly unlikely that you will be able to sell it without taking a loss.

There is no way to mitigate against this 100%, so you need to make sure you are making enough profit to cover potential losses. But you can reduce the risk in the following ways:

Reduce your trade volume or even stop trading during periods of high volatility.

Identify trends: if you think the price is falling then reduce your buy orders or place them further from the going rate.

Peer to peer marketplaces

The easiest way to get started as a bitcoin broker is to use a peer-to-peer marketplace services where anybody can register and start buying and selling coins immediately. Most of these sites will allow you to choose between multiple fiat payment methods, including national bank transfers and digital wallets like paypal or okpay.

As both professional traders and individual bitcoiners use these sites in a very similar way there is no minimum capital requirement – as long as you have enough cash or coins to make a trade you can use a service like this, although there may be a small minimum bitcoin balance for creating your own adverts. You also don’t need to go out looking for customers – you just create an offer or respond to somebody else’s offer.

Of course the other side of that same coin (pun not intended) is that there is a lot of competition when you use something like this. It is also true that reputation – having an established history or trades through that particular site or service – is important. This means that beginners may have to start off by making trades with no profit, or even at a small loss, in order to build up a reputation and perhaps a few regular customers, before they can start getting any significant amount of business at more profitable prices.

The most popular peer-to-peer marketplace is localbitcoins. This site has a good number of users in most countries around the world, and enables trades using a wide range of different payment methods. There is also an active forum where you can network with other brokers and pick up tips and information or ask questions of more experienced traders.

Another interesting service is multisigna. The technology behind this exchange is more advanced than local bitcoin and is more secure; because it uses multi-sig security users holding coins on the site do not take the same risk, of being hacked or of the site going out of business and taking users’ balances, that you take with a centralized escrow service like localbitcoins. But there are fewer payment options and they have significantly fewer users as well.

‘over the counter’ sales

Another way to operate your business is to conduct ‘over the counter’ sales. These are larger sales negotiated with individual buyers and sellers, rather than through placing publicly viewable offers on an exchange.

The advantages of operating like this are that you make a smaller number of larger trades, meaning more profit per trade, and that you will probably not have to pay commission to work through a third party service.

The disadvantage is that you will have to find your own clients, rather than tapping into a large and established client base through on an existing exchange.

You can set yourself up as an ‘OTC’ broker by creating and advertising your own website, or through using something like the bitcoin OTC web of trust. Creating your own site comes with an additional opportunity to act as a broker for alternative cryptocurrencies as well as BTC.

Operating an exchange

White label exchange services such as the one operated by leverate allow brokers to set up their own exchange website / app with full trading platform, and even to aggregate liquidity from other exchanges.

This is a highly competitive market which will probably require a significant investment as well as a lot of work to make a success out of, but arguably offers a much greater potential profit than the other options listed here.

And also…

The lakebtc exchange is advertising the opportunity to become a ‘lakebanker’ on their website. They give few details, however, as to exactly what this entails and what terms they are offering. When I contacted them they replied swiftly asking for more details on my personal experience and circumstances, but when I replied saying that I wanted further information for this article they didn’t get back to me. I will leave it to the reader to decide if it is worth pursuing more information about this opportunity.

How to be a crypto broker

Cryptocurrencies, such as the pioneer bitcoin, are a trending asset nowadays. Those who invested in them early on didn’t know they were sitting on a fortune until this market gained traction. Now, they have become quite mainstream, and more and more people have expressed an interest in trading them. If you are looking for a profitable venture, you can set up a crypto brokerage to provide people with the opportunity of trading these popular digital currencies. But how do you go about it? What steps have to be followed? If you are ready to be a crypto broker, here are some of the things you need to do:

Get proper legal counsel for fulfilling licensing requirements

Before you start executing your plan, you need to understand the regulatory demands of being a crypto broker, and for that, you need a lawyer. You will have to obtain proper licensing in all jurisdictions where the company plans to operate. In some places, crypto brokers operate without regulatory oversight as regulation and government haven’t caught up, while in others, they are well-regulated and comply with all policies. Best crypto brokers are the ones that are appropriately regulated. Legal counsel is necessary because the regulatory requirements are different for every jurisdiction.

However, you must remember that cryptocurrency is not controlled under any legislation as off now. The governments and various regulatory authorities have not caught up with the ever-evolving technology that is facilitating the increasing success of cryptocurrencies and blockchain. Therefore, cryptocurrency operators and brokers within the united states and across the world must obtain a license under the category of money transmitting businesses.

These brokers must also follow the rules and regulations set by CFTC and SEC, amongst others. It is also necessary that all crypto-brokers must know and adhere to KYC – know your customer regulations. The reason is all crypto-broker exchanges fall under the umbrella of being a currency exchange (just like traditional currency or money exchange brokerage).

The KYC regulations are gaining popularity and becoming a more and more prevalent practice to combat financial crimes such as money laundering in the cryptocurrency domain. These rules and regulations have been in place in the united states since 2002, thank the patriot act. However, these regulations may vary by each jurisdiction and state. Therefore, while you work to set up your crypto-brokerage, always consult with an attorney to ensure you are abiding by the law.

Make sure you have the funds

You should know what costs are involved in setting up a crypto brokerage, such as hosting, technology, government registration, legal fees, and advertising. While you may not need all the funds upfront, it is best to have access to enough capital to help you get started.

According to some estimates, you may need a bare minimum investment of $135,000. However, there is no set price for how much it may cost your crypto-brokerage to takeoff. Not giving initial capital funding a proper thought is one of the most critical mistakes made by most new crypto-brokers. Therefore, it is imperative that you plan for the future, consider all aspects. Starting a crypto-brokerage with small capital investment may cover the initial costs of development and planning out your business; however, it will not be enough in the long run. You may end up short on cash to run the critical operations of your establishment until you start making money off it.

Another classical rookie mistake made by most crypto-broker startups is, obtaining a license from dodgy or fraudulent crypto-exchange providers. These crooks charge crypto-brokers ongoing regulation fees but fail to mention what legal obligations the crypto-broker is obligated to at all times, and what financial capital will the brokerage required to set up and maintain the operations of a consistent crypto-broker exchange.

Find a trading platform or develop one

In order to help your customers trade, you need to have a trading platform. There are two options at your disposal; either offer your clients an existing platform in the market or hire someone to develop a proprietary one for you. This can depend on your budget as well as your preference. Lots of good brokers in the market offer traders the metatrader 4 platform by metaquotes as it is the top platform in the market.

Partner up with a payment processor

Not all payment processors are the same. They have different fee structures and policies like the time taken for transactions to be processed. The lowest transaction fee needs to be your priority if you want to compete with other crypto brokers in the market. Apart from settlement time, compliance with PCI DSS, which is a set of best practices for ensuring cybersecurity, is also important.

Implement strong security

If you want your crypto brokerage to take off, your priority should be to create a safe trading environment for your brokers. You should add two-factor authentication and maintain encrypted databases to give peace of mind to your customers. Cryptocurrencies are a ripe target for hacking and cybercrime, so have strong security measures is important.

Along with these steps, you also need to do live beta testing, have an effective marketing campaign in place, and add reliable and available customer support for assisting your clientele.

So you have built your crypto-brokerage exchange, and you have everything in place where they should be. You have signed a contract with a financial firm that will facilitate the payment processing for your exchange. You have also taken extra measures to ensure that your crypto-broker exchange is aligned with all the rules and regulations implemented in the crypto-broker industry. You have also deployed some of the best and state-of-the-art security protocols to protect your crypto-brokerage from cyber-attacks. However, you must remember never to open your business doors straight away, always do a beta test and check if the exchange is operational will all its capabilities flawlessly.

PR and marketing campaigns

Once you have launched your crypto-broker exchange, you must connect to outlets such as coindesk for crypto updates and news. You must devise an adequate marketing campaign along with financial requirements to promote your business. It will ensure that your initial investment does not run out before you start making profits. Most commonly, crypto-brokers do not assign a marketing budget because they rely on free marketing via various social media platforms until the brokerage reaches a critical number of traders using your business.

Prompt customer support

It may be the last step while setting up a successful crypto-broker exchange. However, efficient customer support will help you shine in your niche and pave your way to long-term success. You must aim to provide customer support that can promptly and efficiently resolve all customer queries, complaints, and technical glitches. Adequate customer service will always respond in a timely fashion, and in order to do so, you must think of using ticketing solutions like zendesk and train a staff that is highly knowledgeable and have experience in providing impeccable customer support to your clientele.

Hiring a team that does not know anything about the crypto-broker business will reflect poorly on your business. A tech-savvy customer services team must know what the jargons and technical processes are, and what are the most common issues that a crypto-user may face while trading through your exchange? Therefore, pay attention and hire a team who knows what they are doing.

We live in an era where rules and regulations are more defined than ever. It goes without saying how extremely important it is for your crypto-broker exchange to follow all proposed and applicable laws and regulations. It will help you maintain a legally compliant business in the market. As cryptocurrency is digital and global, your exchange must be compliant with all regulations and laws, not just what is imposed in your local jurisdiction. It is important because you may be in one location, but your user may be sitting on the other end of the world with its own sets of cryptocurrency laws.

As the cryptocurrency legislation is dynamic and rapidly evolving on a global scale, you must hire an in-house full-time legal compliance team. You can also opt to outsource a well-reputed law firm to work as your compliance team with expertise in global cryptocurrency regulations.

Final thoughts

You must also know that there is no stated step-by-step manual to help you establish a successful crypto-broker exchange. Even if there was, no guidebook could answer all the questions that you may face while you set up your business. However, we hope that this quick guide has given you some basic foundation knowledge of some of the critical areas you must look into. This information will definitely work as a runway for your business plan to take off. Researching your local market, knowing your competitors, and what services they are offering will not only help you devise a strategy to help you compete. Additionally, you can use that knowledge to offer unique services and something no other crypto-broker exchange in your niche is offering.

How to become a successful cryptocurrency trader in 2020

How to become a successful cryptocurrency trader

The interest in cryptocurrency has increased significantly in the last 10 years, with more and more people aspiring to become successful cryptocurrency traders. From crypto trading to blockchain games, more and more industries are adopting cryptocurrency transactions and technology. Interestingly enough, according to data, now there are more than 47.14 million blockchain wallet users from all over the globe.

Yet, becoming a successful cryptocurrency trader in 2020 can be hard. There are many challenges that blockchain technology and crypto trading have to overcome, with the year 2020 being one of the most serious tests for the world economy.

If you are a newbie, though, do not hesitate to sign up for our crypto trading course. With us, you can learn how to overcome the obstacles that the cryptocurrency industry is facing today and become a successful cryptocurrency trader in 2020!

This article will reveal the most important things you must understand if you want to become a successful crypto trader.So let’s look at the biggest challenges to cryptocurrency and crypto trading in 2020, challenges that will affect both beginners and experienced crypto traders.

The ultimate guide on how to become A successful crypto trader

Successful cryptocurrency traders know the basics of the cryptocurrency world by heart

To become a successful cryptocurrency trader in 2020, you should invest enough time and resources to understand the complexities of crypto trading. It’s not a secret that cryptocurrency, defined as virtual money, is a phenomenon that has already revolutionised the entire financial sector. As cryptocurrencies are governed by computer algorithms, not central banks , more and more people turn to cryptocurrencies and crypto trading.

It’s not a secret that the cryptocurrency market is highly volatile . Take bitcoin, which has a fixed quantity of BTC, for example! To become a successful cryptocurrency trader, one has to understand that volatility is an important measure of risk, which can help traders make a fortune.

Also, we should note that the most widely used cryptocurrency is still bitcoin , launched in 2009. The potential of bitcoin inspired a wide range of cryptocurrencies, known as altcoins . A deep understanding of the industry and the top cryptocurrencies that will explode in 2020 can pave the way to crypto trading success.

In-depth knowledge and analysis are crucial to help crypto traders develop a consistent trading strategy. After all, consistency is the key to success! Analyse your moves, learn from your mistakes, and focus on your long-term success instead of quick profits.

To become a successful cryptocurrency trader in 2020, you should embrace the pros of cryptocurrency trading

Wondering why the world of cryptocurrencies has evolved so much and why blockchain technology is a big thing ? Well, cryptocurrencies have various advantages, including their decentralised nature - advantages that successful cryptocurrency traders have already embraced.

Cryptocurrencies can offer inflation protection in 2020 and eliminate the need for third-party payment processors . On top of that, all cryptocurrencies use blockchain technology to ensure user privacy and safe trading . In fact, data privacy and safety are essential in our tech-driven world.

Furthermore, to be successful, a cryptocurrency trader has to understand the evolution of cryptocurrencies over the years, which is impressive. As of june 2020, according to sources, there are more than 5,300 cryptocurrencies out there . Some cryptocurrencies can be exchanged for fiat currencies, which may lead to an increase in crypto-to-fiat payment platforms.

On top of that, blockchain technology can impact the whole world far beyond the financial sector, so people are crazy about trading cryptocurrency . Various fields, including the gaming industry, healthcare, space exploration, and music, have turned to blockchain technology to increase user safety and interoperability. All that can result in higher acceptance of cryptocurrency transactions and trading.

To become a successful cryptocurrency trader, one should learn how to overcome the biggest challenges to cryptocurrency in 2020

Despite the increasing popularity of cryptocurrency and blockchain technology, we have to agree that the year 2020 has been grim for many industries . So, let’s look at the biggest challenges to cryptocurrency in 2020 that successful cryptocurrency traders have to overcome.

Cryptocurrency and COVID-19

From global unemployment to healthcare burden around the globe, COVID-19 has transformed our world to a point of no return. The ongoing coronavirus pandemic keeps challenging economies worldwide. The world of cryptocurrency trading is no exception! In fact, IDC’s worldwide blockchain spending guide predicts a slowdown of blockchain solutions in the short-term .

That said, in the long-term, the blockchain industry may play a vital role in online payments, supply chains, healthcare monitoring, loan distribution, and even e-voting. As experts claim, returning back to normal won’t be an option after the pandemic, so the cryptocurrency industry can only help us adapt to a post-coronavirus world.

Thus, successful cryptocurrency traders have to invest time in in-depth analysis and look at the bigger picture. Cryptocurrency courses and workshops can help traders get up-to-date information and connect with other traders.

Cryptocurrency and crypto regulation

Despite the perks that blockchain solutions can offer in 2020, there are many uncertainties and no clear global regulations on the use of cryptocurrencies and crypto trading . Therefore, cryptocurrency traders who want to conquer the crypto world have to familiarise themselves with all these specifics. Believe it or not, though many countries admit that crypto trading isn’t illegal, crypto trading hasn’t been legalised worldwide either .

No doubt that one of the main challenges to the cryptocurrency world is the number of new bills in 2020. The EU fifth anti-money laundering directive or 5AMLD , for instance, is one of the major changes in the crypto field. Note that 5AMLD requires crypto platforms to identify their clients for anti-money laundering purposes.

In the US, the discussed cryptocurrency act of 2020 , triggered by facebook’s libra project , also demands more digital clarifications in order to prevent online crime and tax evasion. So, as stated above, successful cryptocurrency traders have to follow the news and analyse all the factors that may affect their trading moves.

Cryptocurrency and crypto infrastructure

To become a successful cryptocurrency trader in 2020, or even the next crypto king , one should be familiar with the crypto infrastructure. Despite all the legal unknowns in the world of crypto trading, the cryptocurrency market is expanding . With the increasing demand of blockchain solutions and crypto transactions, however, platforms will need to improve their infrastructure to accommodate more and more people.

Scalability becomes a major concern to attract new cryptocurrency traders in 2020 and guarantee pleasant user experience and safety all at the same time.

When it comes to user experience, we should note that usability is also a major obstacle to cryptocurrency . Crypto trading beginners and users who are not exactly tech-savvy may experience difficulties with crypto transactions, especially for possible day-to-day payments.

In 2020, successful cryptocurrency traders should protect their safety

Though blockchain technology is considered unhackable, data rights and safety are still some of the major challenges to cryptocurrency trading in 2020 .

For instance, cryptocurrencies that are offered in exchange for fiat currencies may become a target of online attacks. To provide an example, trinity wallet lost $2 million after hackers had targeted its payment processor system moonpay. When it comes to future day-to-day payments, cryptocurrency experts should also think about how to resolve possible buyer-seller disputes.

Cryptocurrency scams are another challenge that successful cryptocurrency traders should deal with. From fake apps to email scams, cryptocurrency scams are everywhere. Here you can learn more about bitconnect and onecoin - two of the biggest crypto scams ever.

Thus, to become a successful crypto trader in 2020, consider finding a reputable broker to protect your safety!

To become a successful cryptocurrency trader in 2020, you shouldn’t turn a blind eye to environmental problems and global economies

To become a successful crypto trader in 2020, you should be aware of all the environmental, financial, and social problems out there. It’s not a secret that crypto mining requires a lot of energy. Believe it or not, the bitcoin’s mining industry uses more power than the whole of denmark ! No wonder that the bitcoin halving of 2020 will impact miners and traders.

Interestingly enough, according to stats, 44% of bitcoin’s and 52% of litecoin ’s mining pools in 2018 were in the asia-pacific region. To make cryptocurrency technology more eco-friendly, experts suggest reducing mining rewards or switching to different mining algorithms . Dealing with such environmental challenges, along with climate change and pollution, is vital for societies to thrive and crypto traders to succeed.

The world of digital currencies is changing all the time, so any successful crypto trader should be aware of how the world economy works. One of the biggest challenges to cryptocurrency in 2020, for instance, is the rise of new bitcoin-like digital currencies .

Interestingly, china has released a major plan to switch to digital payments to take on bitcoin and their dependency on the US dollar. No doubt this process will affect crypto trading across the globe, so successful crypto traders should stay informed in 2020.

To become a successful cryptocurrency trader in 2020, you should tame your emotions and understand the social attitudes towards crypto trading

Though the cryptocurrency industry can change the whole world, we have to admit that the cryptocurrency market is veiled in misconceptions. As a result, social attitudes towards crypto trading and blockchain platforms are still pretty negative. Due to poor regulations, security concerns, and high volatility, many people still consider crypto trading dodgy.

As cryptocurrencies have been used for illicit activities on the dark web, many refuse to believe that the cryptocurrency world is already a vital part of our reality. Nevertheless, a crypto trader who wants to be successful in 2020 should focus on trading education, analysis data, and consistent trading - not on social attitudes.

On top of that, crypto traders should control their emotions to become successful. There’s no place for revenge, fear, or overconfidence in trading. Do not forget that trading is not gambling!

Simply create an enjoyable work routine, find a balance between work and personal life, and stick to your plan to crypto trading success!

Key points

To become a successful cryptocurrency trader in 2020, you should invest a lot of time and resources in trading education. After all, the world of cryptocurrencies has evolved significantly over the last decade.

The year 2020 has challenged economies and societies worldwide, and crypto trading is no exception. If blockchain technology manages to overcome some of the challenges of the ongoing pandemic, the world of cryptocurrency trading might win our society.

One of the main problems of cryptocurrency in 2020 is unclear crypto regulation. Volatility, safety concerns, and usability are also major issues that successful crypto traders should consider.

Successful cryptocurrency traders should not turn a blind eye to the environment and all the economic trends and social problems across the globe in order to stay ahead of the market.

To become successful in 2020, any cryptocurrency trader should learn how to control their emotions and stay consistent.

In the end - though blockchain technology and virtual payments offer numerous benefits - cryptocurrencies are still not widely accepted. The year 2020 with its turbulent events can determine the future of the entire crypto world.

If you are a beginner to the fascinating world of cryptocurrencies, we at trading education are here to help you explore the world of crypto trading. Simply sign up for our crypto trading course to become a pro in 2020!

Start trading crypto with etoro

It's not difficult to begin trading cryptocurrency, and you can begin with a demo account from etoro within minutes. Simply create a trading account and begin trading! Once you feel confident in your trading ability, you can switch straight to a live account and deposit your funds and start trading the cryptocurrency markets in real time.

Why be A cryptocurrency trader with etoro?

Trading cryptocurrency with etoro comes with certain benefits, such as the ability to:

Buy and sell or go long and short cryptocurrency cfds, meaning you could potentially profit from both rising and falling markets.

Trade with a well-established, highly regulated company including regulation from the USA, the UK's financial conduct authority, the australian securities and investments commission, the cyprus securities and exchange commission.

Access a wider variety of top cryptocurrencies: as a global pioneer in cryptocurrency trading, etoro’s platform already offers many of the world’s most popular digital currencies, with plans to continue adding new ones in the future.

Be part of a greater crypto community: we’ve found etoro's crypto traders to be innovative, savvy and progressive thinkers who are as enthusiastic about the future of blockchain as we are! Etoro is not just a platform for investing — it’s also the ideal place to engage, connect, and share knowledge with one another.

Discover the smartest way to invest in cryptocurrencies: the innovative cryptoportfolio™ is a first-of-its-kind financial instrument: a diversified and balanced portfolio of top-performing cryptocurrencies, professionally managed by etoro’s investment experts for optimal investment.

Let experienced crypto traders work for you: etoro’s exclusive copytrader™ technology enables clients to compare top traders’ performance and choose to replicate their trading activity automatically and in real time.

Are you ready to learn how to become a successful cryptocurrency trader in 2020 for real? What’s holding you back? Let us know in the comments.

Trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors.

Etoro is a multi-asset platform which offers both investing in stocks and crypto assets, as well as trading cfds.

Please note that cfds are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading cfds with this provider .

Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors.

Steps to starting up an independent broker dealer

If you want to become a broker-dealer, you can either join an existing firm or start your own company. If you choose to work for someone, you may be investing in a management team about which you know very little. But the payoff is that the workload is much lighter. But if you decide to go out on your own, be aware of what's involved. It's almost like investing in your own startup, which requires a lot of work, time, patience, and money. One benefit is that you know who's heading up the firm—you. So, if you aren't afraid of a lot of hard work—not to mention the time and money you'll have to sacrifice—you're probably ready to open your own broker-dealer firm. Keep reading to find out more about what's involved in achieving and growing a successful broker-dealer firm.

Key takeaways

Opening your own broker-dealer firm can be a rewarding and challenging venture.

Ask yourself whether you can afford to sacrifice the capital needed.

You'll need to demonstrate experience, line up principals, and file the necessary forms in order to be approved.

Benefits of going into the broker-dealer business

Just like any other venture, there are some obvious benefits to going into business for yourself as a broker-dealer. First, there's the absence of bureaucracy that comes with working for someone else. Bureaucracies often lead to more formal and rigid systems that leave little room for innovation, putting rules in place that companies must adhere to strictly. Going into business for yourself also gives you the freedom to do things your own way. And don't forget, there's also the potential for significant wealth. This last point will likely motivate most readers, but getting there won’t be easy. You need a scalable business, experienced management personnel able to lead and successfully navigate through difficult times, capital, and the correct licenses and memberships, including:

Licenses to sell investment products

Financial industry regulatory authority (FINRA) membership

Securities investor protection corporation (SIPC) membership

An approved form BD from the securities and exchange commission (SEC)

Before you get started

If you’re an independent contractor and still on the fence about branching off on your own, figure out how much you net annually. Take that answer and apply it to the human side of the equation. For example, is that enough capital to risk without altering your lifestyle? Whether you admit it or not, lifestyle plays a tremendous role. You’re still going to want that summer vacation, luxury car, and that nice house in a good school district, even if it requires the most dangerous word in the financial universe—debt.

People who live with minimal debt often are happier. If you already keep personal costs low and you’re doing well at your current broker-dealer, then it makes the transition much easier. The best approach, of course, is to build capital from your current position while also cutting personal costs. Your available capital will pile up quickly, which will lead to a less risky venture in your own broker-dealer. FINRA essentially wants to know that your capital will cover net capital requirements plus the first six months of expenses without any income. FINRA wants to keep the industry strong. Therefore, it only will approve applications backed by necessary capital and strong and experienced management.

To give you a more basic idea of startup expenses, consider this shortlist:

FINRA registration

State registration(s)

Consultants

Employees

Deposits to clearing firms

Although the list is short, the expenses can be overwhelming—especially unexpected ones. One key to success is to employ a management team that is good at keeping costs low without sacrificing growth potential. This is a fine line very few people have the ability to toe.

Not to deter you from this venture, but you should also know that most new broker-dealers lose money in their first year, with an average range between 10% and 20%. Keep in mind that it takes any business three years to be profitable. Therefore, this shouldn’t act as a deterrent. As long as you surround yourself with people who possess poise, leadership, and problem-solving skills, the odds of success may be in your favor. Just be sure to balance out the team with sales-oriented brokers and experienced management.

Getting started

First things first, you'll need money. How much you need to get started depends on how you intend to function. Just getting started requires capital of at least $50,000 to $100,000. If you intend your broker-dealer to trade for its own accounts, that amount increases to anywhere between $100,000 to $150,000

Experience also plays a big role. You'll be more successful if you've already worked as an independent contractor. Otherwise, the risk is elevated. Think about it, would you trust your money with someone who had little to no experience trading?

You’re going to need two principals and one financial operations principal—with one year of direct experience and two years of indirect experience—if you want to be approved. Principal officers must be registered with FINRA, take qualifying exams, and be fingerprinted.

After filing form BD via the central registration depository, the SEC has 45 days to decide if you’re approved. This form allows the SEC to review your personal and professional information and background, review information on your business partners and employees, and helps it determine if there are any conflicts of interest. The SEC wants to see high professional standards, fiscal responsibility, details on the types of securities that will be sold, the organizational and operational structure of the business, and a list of states where products will be sold. If you receive good news, your order granting registration will not be effective until you become a member of a self-regulatory organization (SRO).

Once approved, you must become a member of a self-regulatory organization (SRO) before your order granting registration goes into effect.

FINRA

The sheer volume of information can make things very confusing. Let’s back up a minute and take a look at what is required to become a member of FINRA:

Form BD

Forms U-4 and U-5 (used by broker-dealers to register with or withdraw their registration from the SEC, sros, and jurisdictions)

A comprehensive business plan

Copies of agreements with banks, clearing agents, and service bureaus

Sources of capital

A description of the supervisory system

Written supervisory procedures

Completion of an anti-money laundering (AML) program

A description of the firm’s continuing education program

The bottom line

All of this information can be overwhelming. FINRA has a reputation for ongoing requests for documentation and constant back-and-forth communications. However, if you get through the approval process and then plan your work and work your plan, the potential rewards for a successful broker-dealer are exceptionally high.

Learn crypto and blockchain

Crypto brokers: how do they differ from crypto exchanges?

What is a crypto broker?

A crypto broker functions as a middleman between those who want to buy or sell crypto and the exchanges that offer these services. Brokers can be individuals or companies that take your funds and place orders on your behalf on select exchanges, or they can be brokerage platforms that offer crypto purchasing and selling services. Using a brokerage platform has the benefit of removing the uncertainty of whether orders will fill as transactions execute immediately at prices set by the platform. In other words, you are not bound by the actions or preferences of other traders in the market.

Why use a crypto broker?

Crypto brokers are incredibly useful for both crypto beginners and those who want to participate in the action but do not have the time to place their own orders or to constantly monitor the markets. The role of a broker is essentially to facilitate cryptocurrency trading in exchange for a fee.

Some of the main advantages of using a crypto broker include:

Its is easier to both withdraw and deposit fiat currencies with a broker compared to an exchange

Many brokers offer market analysis services to help plan strategies

They are often regulated by financial authorities such as cysec to ensure the relative safety of your funds

How does it differ from a crypto exchange?

Trading cryptos on an exchange is a hands-on exercise that requires you to actively select the right coins and execute transactions at the most profitable prices. You are constantly competing and interacting with other traders attempting to outperform you. Prices on exchanges are more susceptible to quick fluctuations. Brokers, on the other hand, set their own rates and are not able to easily change them in real-time.

The additional knowledge and skills required to trade on crypto exchanges are offset by the increased flexibility and freedom that this method offers. For this reason, it may be a good choice for those who plan to get into cryptocurrency trading for the long term. Skipping a broker and learning by yourself is the best way to become a more knowledgeable and proficient trader. Especially as you consider allocating more capital to cryptos, it is imperative for you to understand the risk and to have full control of your investments.

Some of the benefits of using a crypto exchange include:

You can be afforded a greater level of privacy as not all exchanges require KYC

You may be able to benefit from market fluctuations more by trading at market prices rather than at prices set by brokers

You have more control and flexibility in terms of the trades you make

You are able to switch exchanges and use different platforms based on your evolving needs

How to become a crypto broker?

If you want to become a crypto broker yourself, you must know how to trade. It is important to be familiar with as many exchanges as possible and all of the services they offer. Depending on the service you wish to provide, it may be as simple as executing orders based on your customers’ wishes, or you may need to familiarize yourself with charts and trends in order to advise your customers on the best trades to make on their behalf. Either way, good knowledge of the cryptocurrency industry, trading, and all associated topics such blockchain are going to be essential.

Learn how to buy and sell cryptocurrency online with a trusted broker

Looking to step into the cryptocurrency market? As they have become one of the most profitable assets of 2020, it is not surprising that many people are now taking an interest in these digital currencies.

For a long time, there was a lot of skepticism about bitcoin and the rest. Even though it still exists, people cannot deny that it is a profitable market and there are many who have made quite a fortune in this space. If you are also ready to try your luck, then you can do it quite easily. Due to the popularity of cryptocurrencies, there has been a jump in the number of brokers offering this asset.

Nevertheless, you have to remember that you must learn how to trade cryptocurrency online at a profit. You don’t want to put your personal information or your money at risk and you certainly don’t want to waste time. This will only happen if you opt for the right broker. There are both good and shady options in the market and your goal should be to find one in the first category. You must find a crypto broker that has gained a solid reputation.

But, in order to verify their offerings, you can check out some broker reviews and then make up your mind:

Security of funds and information

Signing up with an online broker involves trusting them with your personal and sensitive information, along with your money. You would obviously want them to be safe, considering the number of cybercrimes. A trusted broker is aware of the risks and has taken the right steps to mitigating them. They protect your funds by keeping them in segregated accounts, which means your money is only used for trading and nothing else. The funds are returned to you in case the broker goes bankrupt.

A good broker has also installed SSL (secure socket layer) certificates on their website for keeping all confidential data away from prying eyes. They also have verification procedures where traders have to provide proof of identity and residence before they can use the trading services, thereby preventing identity theft and money laundering.

Access to numerous crypto assets

Even though bitcoin is the world’s top cryptocurrency, it is not the only option and there are various others that can be explored and used for making profits. But, not many brokers provide this opportunity to do so. You will come to know that the broker you are working with is different in this regard because they give their clients access to numerous crypto assets. The offerings start with bitcoin, but go on to include ripple, litecoin, ethereum, bitcoin cash, DASH, monero, IOTA, NEO and NEM. You can invest in as many cryptocurrencies as you want to maximize your crypto returns.

Straightforward signing up

One prominent feature about any good broker that appeals to many traders is that they have kept their signing up process very straightforward. If you want to open an account with a trusted broker, you just fill out one form with some basic data and are immediately registered. Then, you can go over the account options provided and opt for the one that is in accordance with your requirement. There is no waiting for days and you can find a trading account option for every trader, whether they are a newbie just starting out, or an experienced trader with a few years of experience.

Availability of learning material

As cryptocurrency is a relatively new asset, there is a lot you have to learn about them before you start trading. Their volatility brings plenty of risk, so it is best to understand what you are doing, or else you will not make any profits. A reliable broker gives you access to the educational resources and training you need in the form of online tutorials, videos, courses, e-books and webinars, so you can buy and sell cryptocurrencies online and make the returns you want.

How to become a sub broker/franchise with a crypto broker?

All that you need to know about crypto broking franchise in india

The cryptocurrency market is showing bullish trends lately with high returns happening in cryptocurrencies encouraging individuals to trade for better benefits in a market slowed down by the coronavirus pandemic. In the times, when plenty have lost their jobs and they are looking for real-time earning solutions, crypto-trading nevertheless ends up as the best option to create a passive income portfolio. But before you deep dive into the world of trading, it is necessary to have the right acumen revolving around stocks, bonds, forex, and a limitless zeal to learn new things. So, it wouldn’t be an understatement to say that working as a sub-broker franchise can bring benefits for you.

But your approach shouldn’t be like a dead-man walking right from the grave to the world of cryptocurrency; on the contrary, knowledge of financial transactions, farsightedness, industry insights, picking up key indicators and rationale will help pave the way to become the best sub-broker with a crypto-broker. Therefore, before we jump into the how’s of this profession or crypto business provided you want to become a sub-broker/franchise, let’s keep things simpler for early adopters by explaining what’s.

What is a sub-broker/franchise?

Let us explain by taking a real-time share trading example and we will accommodate the same logic in a cryptocurrency exchange sans centralization.

For example, NASDAQ or BSE appoints someone as the main-broker, for example, X. Now, X has the role to bring more liquidity to the exchange and for that purpose, X, appointed by NASDAQ or BSE as master franchise or main head in the hierarchy of trading business appoints Y as the sub-broker. The role of Y will be similar to that of X, and he/she will also use the platform of X or his/her exchange to pool in more liquidity by riding on the brand value that X has created. This is how the cryptocurrency trading platform functions. You can earn consistent income from the spread or commission for the liquidity you bring to the exchange. If you want to open a new source of income for you, register with some of the renowned cryptocurrency trading platforms like PCEX member to become their sub-broker/franchise and diversify your earning sources.

How to become a sub-broker/franchise with a crypto-broker like PCEX member?

Meet with qualification requirement

It is mandatory to meet the minimum qualification level to end up as a sub-broker/franchise on any cryptocurrency trading platform. You shouldn’t just pursue it as a hobby since most hobbyists do not deep dive to understand the market, like how it works. Therefore, you are at a closer end of the receiving end to lose with very little knowledge of the domain. There are multiple certification courses as well that can teach you to become a broker. You can try them out as well.

Documentation is necessary for completing the next process of onboarding. Government-approved ID copies like adhaar card, pan card, driving license, passport, education proof, certification proof, address proof with current or permanent supportive documents like electricity bill, telephone, or gas bills must be verified to register yourself on any cryptocurrency broker exchange.

Picking the cryptocurrency brokerage firm

At the time of starting your journey as a sub-broker/franchise, the destination you want to reach will depend on the route you take. Hence, it is necessary that you have picked the right brokerage firm. Do check the liquidity on their platform before you opt-out to associate with them. With most customers, trading fees, spot-on recommendations, and value addition in the form of guidance tempt investors/traders to associate with the exchange. You must check out what the cryptocurrency exchange broker that you want to join as a sub-broker/franchise provides to its customers.

Specific requirement demand

Whether you want to register as a master franchise, franchise, or just a freelancer , there are some specific infrastructure and resource requirements that you need to meet. In some of the cryptocurrency exchange broker platforms, the demand for office space, non-refundable fees, commission structure, and other details must be checked well in advance. After you have compared the same with all other crypto-broker in the industry, you can take your pick.

Explanation call or service explanation

Do not naively join any cryptocurrency broker exchange for crypto business as a sub-broker to earn a consistent regular income, rather, ask them to set-up an explanation calls for business model clarification. At no point in time, you must be playing the guessing game with the cryptocurrency brokerage firm. Only when you are deeply satisfied and know how you can work and earn from the exchange, you must proceed with the association.

After you are convinced with everything, you are asked to make the payment and get yourself registered as a sub-broker/franchise at any crypto trading platform. You are allotted a specific business trading tag, a training session, support, and other marketing collectibles.

PCEX member is an emerging cryptocurrency trading platform with very high liquidity and a reliable track record. It is the only crypto broker in india that has introduced this concept to create more opportunities for businesses in the crypto industry. To join as a sub-broker or franchise, you can go through all the processes that are discussed above and start your passive income source for sustainability in the challenging coronavirus struck market.

Cryptocurrency brokers – the complete trading guide

The full list of online brokers offering cryptocurrency trading, including bitcoin, litecoin, ethereum and more.

Bitcoin trading has been supported by a number of brokers for a couple of years already but this year saw an absolute explosion in the number of cryptocurrency offerings. The incredible rally in blockchain asset prices has attracted so many new companies to the crypto bandwagon – how does a trader choose who to go with?

To help, finance magnates has assembled the ultimate list of brokers offering cryptocurrency trading. We examined which top currencies they support and what the offered leverage is, so you can review the whole market in one place.

Why trade with a broker?

Most crypto investors still trade with exchanges directly, which raises the question – what is the need for a broker at all? There are several answers to this but all emanate from the issue of user experience.

Most cryptocurrency exchanges were not built with a simple trading experience in mind. As such they offer cumbersome interfaces, little support for 3rd party platforms and very limited customer support options.

If you have ever tried to contact one of the bigger exchanges with a problem that needed active support, you likely only received canned email responses that felt like corresponding with a cheap chat robot. A good broker must offer great client support so if you forget your password and can’t get a text message confirmation (2FA) you won’t completely lose your account as can happen with an exchange.

Why are FX brokers adding cryptocurrencies?

In a word, volatility. While long term investors can just buy an asset at an exchange, transfer it to a secure wallet and hold, day traders look for something else. Volatility creates many small trading opportunities which they try to capture with risking holding for long term. As such, crypto assets are magnet for short term and algo forex traders.

The major fiat currency pairs offer volatility that is literally thousands of times less than cryptocurrencies, so they can not match the excitement associated with trading them.

Beyond that, there is incredible hype right now surrounding bitcoin and ethereum in the mainstream financial media, and many clients are simply demanding access to them as a result. By offering just a few more cfds, a broker can capture a huge new market of people looking to speculate on this hot new thing that they heard about without any desire to ever use blockchain assets for anything else.

How to become a successful trader – 5 steps to follow

The famous saying of “90% of traders lose 90% of their account balances” is true. In fact, those stats are given by most licensed brokers. You might ask yourself why do so many traders lose, or if trading can be profitable at all, but in reality, this conception can be seen in our daily lives.

As an example, becoming fit should be easy! You go to the gym and exercise. But most people fail to do so, as there are much more things to do, like checking your body composition, setting a workout plan, monitor your progress, eating healthy…in the trading world, the same thing happens, and when you look closely at every bad trader, you’ll notice a basic rookie mistake has been done.

You’ve probably read thousands of articles about how to become a successful trader, but they’re mostly cliché gimmicks and motivational posts…well not in this article.

So without further ado, here are 5 essential tips EVERY trader should follow:

1- define your trading style

There are 3 most common trading styles:

Day trading: opening and closing positions within a single day

Swing trading: opening positions for a few days or weeks

Long term trading: closely related to value investing or the “warren buffet approach”, where traders open positions for months or years, as part of a portfolio.

Before opening any trade, you MUST know for how long you’re planning to keep the trade open. Usually, when volatility is very high in the market, traders reshuffle their portfolios and focus more on day trading or swing trading, whereas if the volatility in the market is weak, you switch to long term trading or investing.

Trading station of a trader with dark mode on

2- picking an asset class

After defining your trading style, it is important to know what you will trade. Is it a certain technology stock like facebook? Or a commodity like gold? Or maybe a cryptocurrency like bitcoin?

There are more than 600,000 publicly traded companies worldwide, and more than 5,000 cryptocurrencies to trade. In order to be able to narrow down your pick, it is a good idea to use a top-down approach, mainly for swing and long term trading, which suggests starting a pick from a macro perspective, such as a specific sector, then picking an industry, then choosing a certain stock for a company that has certain news or earning calls coming up.

Another example for day trading would be picking companies with a highly volatile stock price for the day. Then going through basic fundamentals such as any news or announcements from the company to know the general consensus of the market towards that company.

There are many different ways to pick your asset class, and each trader usually develops his own technique. But what’s very important is to stay updated with the news. The cryptoticker trading group for example, always sends out regular news, price analyses, and forecasts on cryptocurrencies. So if you’re trading cryptocurrencies, it is highly advisable to follow our regular updates.

3- do your own analysis

Yes, your OWN analysis. Many traders surf the web for other people’s analyses and end up opening losing trades. You can definitely get inspired by other traders in order to better assess a certain trade, but you MUST go back to your charting software and do your own work. This is essential, as different traders have different exit strategies, different goals, different trading styles…not every gym-goer has the same workout, why would you copy other traders?

Technical analysis is very important and helps you define your entry and exit trades. It is not the only analysis you should base your whole strategy on though, as important news sometimes can make our whole technical analysis void.

For example, let’s say you charted your way up to a good trading strategy for a certain stock. The technical analysis shows you a strong uptrend, but you miss important news, which was a bad earning call. Nothing will matter anymore, the price will dip and all your work will go to waste.

4- set up a risk management strategy

Another crucial step to consider is when to get out of your trade (you won’t keep your positions open forever, as even long term traders reshuffle their portfolios occasionally).

For proper risk management, you must keep in mind 3 things:

Entry level: it’s the price where you plan to enter the trade, always based on strong support or resistance levels.

Exit level:
- Stop loss: it’s the price where you limit your losses and avoid wiping out your account
- Take profit: it’s the price where you take your profit and get out of the market before it reverses

Risk/reward ratio: in laymen terms, it is a calculation of how much you are willing to risk in a trade (stop loss level), versus how much you plan to profit from a trade (take profit level). Anything less than 1:2 is not advisable (risking 1$ to make 2$).

ALWAYS know the above levels before entering any trade. It is also advisable to have automated stop-loss levels, as we humans tend to get emotional, hoping for the price to go back up while it sinks further.

5- document everything

So you defined your trading style, picked an asset to trade, did your proper research, and set up your risk management strategy. What’s left now?

The most important step, of course, is to document everything. Not all trades will be winners, and that’s part of the business. But what you can do is assess where things went wrong and improve your trading strategy in your next trades. This is the only way to get better.

Documenting your trades is known as having a trading journal. This might be an excel file where you register your asset class name, time of entry, time of exit, price of entry, price of exit, leverage, net profit/loss and maybe inserting comments. After a certain period, you should be able to assess your overall trading performance, know which trades are ending up horribly wrong, and where you’re doing a good job.

Professional traders usually use the kelly criterion formula to assess what percentage of their money they should allocate to each investment. But you can always find other metrics to measure your success.

Follow each of the 5 above tips step by step, rinse, and repeat. The only way to get better is by trying over and over and learning every day… there are no shortcuts.

Stay updated, stay ahead
rudy fares