Risk Management

Three Challenges Brokers Face When Managing Risk

 

  1. It’s a 24 Hour Market – The financial stability of a broker is greatly dependent upon an effective risk management strategy. Like a house with an unstable foundation, nothing can be realistically be built on top unless the foundation is repaired. Due to the 24 hour nature of FX, any broker with expectations for success must watch risk around the clock. Add to the fact that the generous levels of leverage offered in this industry can create massive exposure swings, and it becomes quite evident how crucial it is to have risk management under control. Many brokers with successful marketing strategies have seen their business fall short of expectations because this critical area was overlooked.

  2. Risk Assessment – Determining how much volume should be covered, assessing risk thresholds, and making judgement calls based on current market activity is a unique skill that is not easily transferable. Similar to trying out trading for the first time, quite expensive mistakes can be made by those with limited experience. This is one area where it does not pay to cut corners.

  3. Growth Assessment – All brokers will eventually encounter either an institutional or high net worth individual. This can be a daunting prospect for those with limited experience. Although the upside potential is massive, some might shy away from the opportunity due to the potential risk. On the other side of the coin, it’s naive to assume these type of traders or acccounts will behave like a normal retail client. In both scenarios, a team of experienced professionals is required to make the proper judgement call.

How Atomiq Consulting Can Resolve These Challenges

Our 24 hour risk management team will immediately keep costs down by eliminating the need for additional staff, desk space, training, and paperwork. Not only are you employing a full-time team, you have experts at your disposal. Our team has the experience to properly evaluate and manage your book of business based on the risk threshold provided to us. In addition, we offer a competitive pricing structure which is designed to incentivize profit maximization.

To learn more about our risk management offering, feel free to email us or add us on Skype using the buttons below.



Blog posts

STP vs DD

It is often assumed that brokers who are market makers, also referred to as dealing desk brokers are always a […]

view more
View all posts