Don’t wait until you’ve lost $500k in a day, to call me.

With a week in Cyprus at the iFX Expo just wrapping up, I want to share one key insight from many of the conversations I had with several new brokers.

If you are starting a new FX Broker, don’t wait until you’ve lost a half million dollars in a day, to a scalper, before you call me.

This year at Cyprus, I was speaking mostly with new and emerging Brokers because we launched Tapaas Lite, which is designed to be more accessible for new Brokers. We have redesigned our dashboard to make it easier for those new to this business to manage there risk. But, it is still built on the same Tapaas core platform.  This means processing very fast moving big data of FX trading with incredible speed and reliability because we use Kdb+, the technology used by 9 out of 10 Wall Street banks for trading analytics.

The insight about how important it is for new Brokers not to wait, came clearly when I was speaking with one team member at a new broker. Because it is a new Broker, each individual has to do many jobs. In this case, the fellow I was speaking with was responsible for writing market research reports which are published for their traders.  But he was also responsible for monitoring risk.

He explained that trading activity is relatively low.  So, monitoring the risk does not take that much effort. To this, my response was, ignoring risk does not take that much effort.  Monitoring it adequately, in the 24 hour trading market of FX, without the aid of technology, certainly would take a lot of effort.  Further, I added that several of our sales have been made just after a Broker has lost $500k or more in a day to a scalper.

We agreed that perhaps it would be better to have  an effective risk monitoring solution like Tapaas in place, before it gets out of hand. The further benefit we saw, beyond mitigating risk, is freeing this scarce resources time, so he can focus more on growing the business with confidence and less on monitoring risk.