Foxes in the Golden State

The financial trading industry can learn many lessons from the world of sport.

This article was written by Nicc Lewis, the Chief Marketing Officer at Leverate.

The world of sport is in a state of revolution! There are many lessons to be learned by the financial trading industry. First we need to know what is happening in sport; why it is happening and what we can learn.

The rather cryptic headline references both English Premiere League football and the NBA. We see the same pattern on both sides of the pond in two entirely different leagues. Although neither season has finished, as of the time of writing this article, the big winners are different in nature from previous seasons. In England the champions elect are Leicester City (A.K.A. ‘the Foxes’). Over in the US, I have heard comments that folks do not even know how to pronounce their name, let alone know who they are. While in the States, this weekend Golden State tied the long standing Chicago Bulls record of 72 season wins. The record was considered unbeatable and was set 20 years ago by the all-star team lead by Michael Jordan.

Leicester were fighting relegation last year and have broken the traditional top four this season. They have achieved all this with no superstars and a fraction of the budget of the big four. The NBA is traditionally dominated by the team with the biggest superstar – but James does not play for the Spurs – Stephen Curry does. It would be demeaning to say Curry is not a superstar, but he is of a different ilk. He is unassuming, with a high work rate and is part of the team. And therein lies the secret to both of the teams’ success.

Both teams base their strengths on the sum of their parts which is accelerated by a high work ethic and strong teamwork. In short – the sum of the parts give a greater whole.

Both traders and brokers can learn from this new trend.

Traditionally, most trades on FX are EUR/USD or another major, depending on your location. Experienced traders tend to pick trades based on market and chart analysis, while newer traders tend to automatically copy successful traders based on their analysis of the traders. One could draw the comparison here to the superstar model in sports.

If traders were a sports team they would use both market/chart analysis and social trading (regardless of their experience) and spread their trades over a number of instruments. Thus the sum of their parts make a greater whole, generating a broad layer of small wins for an overall bigger return.

For brokers there are many elements that can be taken from this. Some might say that this trend can be translated into the fact that you do not need superstars in your sales teams. Remember the Belgian hens? I believe that when we look at trader acquisition it points more to three areas: the acquisition pie, optimization of the funnel using technology, and promotion of platforms and social trading.

The heavy reliance on affiliates and IBs in an ever more competitive market means that brokers should be looking to spread their channels wider and broaden their target markets by moving to newer geographies. Adoption of media, SEO and other channels will give a further reach in finding new traders, while new booming markets, like in Asia, can give access to markets that are less competitive.

In order to achieve results, the sales teams will need tools to make them into champion teams. Here technology can help; in particular, smart funnel tools that guide mass traffic and put the teams in touch with traders at the critical decision making points, therefore optimizing their use of time, increasing conversion and reducing overall costs. This approach also makes media buying a viable option for brokers.

The last point is the promotion of trading platforms and social trading. Social trading has already been discussed as a strong tool for traders and brokers should encourage traders to be more successful. The simple math is that it is more cost effective to retain traders than acquire new ones.

Social trading is just one aspect. The days of the desktop are limited and in many cases simply outdated and in decline. Think about your own habits. A newer generation are looking at web and mobile as their key drivers and use multiple platforms throughout their daily lives. Mobile in particular has become a way to stay connected to our lives and apps on the move, at work and even at home. Promoting use of mobile and web will mean that your traders will be more engaged. The more engaged they are, the more value they will generate.

There is one more comparison we can make between the Leicester and the Spurs phenomenon and our industry. Both offer value for money. In our world of instant knowledge we all look for value for money. Traders look for value for money in their experience. The tools lie in their hands and in the hands of their brokers. Whether you are a trader or broker, it is time to set your winning strategy.

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