Forex Introducing Brokers Provide an Additional Profit Stream to Your Forex Trading

Posted by on Feb 27th, 2011 | no comments home title

There are many people who are involved in forex trading and do not know about the great benefits that forex introducing brokers (IB’s) can bring to their trading. One of the direct advantages of using these brokers is that the trader gets cash back in the form of forex rebates. Since the cash received is based on trading volumes, this becomes a great way for traders to reduce their losses while maximizing their profits.

How it works

IB’s normally get compensation for each and every trader that they refer to brokers. The commissions are calculated on the basis of the trader’s trading volume. This commission system is good for the IB but you may wonder what the actual trader gets. The question is, does the trader benefit from cash flows as well? Certainly!

The trader does get cash back rebates. In this scenario the introducing broker forwards a portion of their earned commission to the trader. The payments can be done monthly and are calculated based on the trading volume in the past month.

Rebates are always paid when there is a “round turn lot”. This is when a trade is opened and closed. Whether the trade was winning or losing is inconsequential. Rebates are paid in either case.

In the business of choosing an IB you have to be quite shrewd as the brokers do not work the same way. There are some rogue IB’s that widen the spread so that they can keep much of the profit to themselves. In such cases you may continue to get your rebates but your trade will be impacted negatively due to widened spreads.

Free Money

Once you find a reputable IB, opened an account at your favorite forex broker through them, and have started earning rebates on your trading activity, you’ve really given your forex trading an edge.

No matter whether your trades are winners or losers, you earn cash rebates. Essentially, forex introducing brokers help you maximize your profits and minimize your losses, all at no cost to you (assuming you find a reputable IB who doesn’t widen your spreads). The more you trade, the more rebates you earn.

Forex IB’s also earn commission on your trading activity, and your broker gains you as a client. It’s really a win-win-win situation for all!