Finance Magnates looks at the sad statistics and tries to figure out the causes of forex brokerage demise.
The history of the retail Forex industry starts in the late nineties. Since then, some companies have grown to positions of hegemony while others quickly faded away, leaving no legacy behind. Finance Magnates takes a look at the industry, trying to understand the lifecycle of forex companies and the hazards that they face.
Read the full article in the latest Quarterly Intelligence Report
As with many popular business theories, the lifecycle theory has roots which can be traced. According to popular opinion, the first footprints of this theory can be seen in the works of Mason Haire, who in 1959 published “Modern Organization Theory”. He was one of the first to notice that organizations evolve in a way which can be described as a path, a path which governs the evolution of most organizations. The others were W.W. Rostow and Roger Penrose. Dennis C. Mueller is another expert to whom lifecycle theory is often attributed. In 1972 he published “A Life Cycle Theory of the Firm”.
Today, the lifecycle of a company is believed to have many stages, although experts differ on the exact number. To boil it down to the simplest possible definition, the lifecycle of a company in the forex industry can be described by the following stages: growth, maturity, decline (ending in Bankruptcy).
Bankruptcy is the worst case scenario for any business, and it happens in the FX industry too. Finance Magnates conducted some brief research on this subject which gives a taste of how the FX industry deals with bankruptcy. We used analytical and marketing data to reach our conclusions.
We noticed that in 2014, roughly 1.8% of brokers went out of business, while in the last 2 years, the share of bankrupt brokers has reached a level of around 17% - that’s 1 out of every 6 brokers.
Understanding the typical lifecycle of an FX company remains a challenging task. Firstly, the nature of the offered product is unique, and does not leave much room for brokers to create new products. Secondly, the rules of engagement are very often altered, and regulations force firms to make decisions which would not be taken were the market forces of supply and demand the only drivers. Lastly, the retail FX industry itself is relatively young. Firms are still around which actually invented some of the key products that the industry is based on.
For all the new firms which aim to replicate the success of the largest market players like Plus500 and CMC Markets, there is left only the path of hard work, discipline and competitive trading terms, combined with superb customer care and constant rivalry.
“We definitely saw a few examples when forex and CFD dealers went bankrupt or just closed their operations due to continuing loses. The main problem which can easily kick out an FX dealer is undercapitalization. Increasingly often, people start their FX dealerships, underestimate the real costs and overlap themselves.”- Peter Tatarnikov, Chairman of the Board at The Financial Commission
The history of the retail Forex industry starts in the late nineties. Since then, some companies have grown to positions of hegemony while others quickly faded away, leaving no legacy behind. Finance Magnates takes a look at the industry, trying to understand the lifecycle of forex companies and the hazards that they face.
Read the full article in the latest Quarterly Intelligence Report
As with many popular business theories, the lifecycle theory has roots which can be traced. According to popular opinion, the first footprints of this theory can be seen in the works of Mason Haire, who in 1959 published “Modern Organization Theory”. He was one of the first to notice that organizations evolve in a way which can be described as a path, a path which governs the evolution of most organizations. The others were W.W. Rostow and Roger Penrose. Dennis C. Mueller is another expert to whom lifecycle theory is often attributed. In 1972 he published “A Life Cycle Theory of the Firm”.
Today, the lifecycle of a company is believed to have many stages, although experts differ on the exact number. To boil it down to the simplest possible definition, the lifecycle of a company in the forex industry can be described by the following stages: growth, maturity, decline (ending in Bankruptcy).
Bankruptcy is the worst case scenario for any business, and it happens in the FX industry too. Finance Magnates conducted some brief research on this subject which gives a taste of how the FX industry deals with bankruptcy. We used analytical and marketing data to reach our conclusions.
We noticed that in 2014, roughly 1.8% of brokers went out of business, while in the last 2 years, the share of bankrupt brokers has reached a level of around 17% - that’s 1 out of every 6 brokers.
Understanding the typical lifecycle of an FX company remains a challenging task. Firstly, the nature of the offered product is unique, and does not leave much room for brokers to create new products. Secondly, the rules of engagement are very often altered, and regulations force firms to make decisions which would not be taken were the market forces of supply and demand the only drivers. Lastly, the retail FX industry itself is relatively young. Firms are still around which actually invented some of the key products that the industry is based on.
For all the new firms which aim to replicate the success of the largest market players like Plus500 and CMC Markets, there is left only the path of hard work, discipline and competitive trading terms, combined with superb customer care and constant rivalry.
“We definitely saw a few examples when forex and CFD dealers went bankrupt or just closed their operations due to continuing loses. The main problem which can easily kick out an FX dealer is undercapitalization. Increasingly often, people start their FX dealerships, underestimate the real costs and overlap themselves.”- Peter Tatarnikov, Chairman of the Board at The Financial Commission
A graduate of the Warsaw School of Economics, Sylwester received an MA specializing in finance and banking. As Finance Magnates' research associate and STA certified analyst, he leaves no stone unturned. Sylwester is the previous minority partner of an NFA registered US forex broker, and since 2003, has participated in many forex projects.
Interactive Brokers Expands Offerings with Daily Options on French Stocks
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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