Like any other business, Online Brokerage has particularities which are not obvious at the beginning of the journey. In this article, I will draw your attention to some common pitfalls and save those intending to start a brokerage some money, time and nerves by shedding light on the challenges ahead of you.
0. Test Your Assumptions.
I marked this point as ‘Zero’ on purpose to highlight it’s importance as a foundation.
When we decide to start a business we are driven by our intuition and past experiences. What we are reluctant to acknowledge is just how much we are driven by emotions instead of calculations. I’m not here to discredit Intuition or ‘Gut Feeling’ as we call it. As a matter of fact, most of the successful entrepreneurs are known for being visionaries i.e. people with extraordinary intuition.
As Albert Einstein once said ‘The intuitive mind is a sacred gift and the rational mind is a faithful servant. We have created a society that honours the servant and has forgotten the gift.’ My interpretation of this genius thought is simple – trust your gut, yet verify assumptions with data. In practice, this means if you truly believe in your business idea, don’t let critics crash it because they are just as subjective as you are, instead find a way to test and validate it.
Test your MVP (Minimal Viable Product). You can test your idea without incurring large expenses e.g. build a prototype of your business and test it on the group of people you know and also strangers. Many providers will be willing to give you a functional demo platform for you to run tests.
1. Legal setup
When approaching legal setup of your brokerage firm the main question is whether or not your country has relevant regulations for Online CFD Brokerage firms. If so, you must obtain the right type of license to run the business. Be prepared for a lengthy process and long hours billed by the lawyers. My recommendation here would be to go along with advisors with good track record.
On the other hand, not many jurisdictions have legislation in place to govern CFD Brokerage industry. In those jurisdictions, you might be treated as any other online business/merchant. This saves you expenses on lawyers and consultants, and also removes statutory obligation to maintain minimal level of capital requirements. This obviously frees up a lot of cash to be utilised for the growth of your business. Nonetheless, even if you are not obliged to maintain minimal capital levels, I strongly recommend implementing similar rule as an internal policy.
Lastly on legal setup, if you are considering onshore vs offshore setups (run a business from a local company or use an offshore one e.g. Vanuatu, St. Vincent and Grenadines, BVI etc.) you need to thoroughly investigate if you would be able to find a reliable banking partner to service your offshore company. Nine times out of ten I would advise doing business onshore, as it inspires trust and eases transactional friction.
2. Human Resources
We regularly fall into a pitfall of doing business with people we already know well, friends and even relatives. Even though we might have an advantage of an established trust, this doesn’t mean these people are right for the business and will be able to drive it to success.
PARTNERS. At the primary stage when you are thinking about starting up with a partner make sure your skillsets complement each other. Also, understand whether or not your goals match e.g. if you are building your dream project and your partner is only after a ‘quick buck’, such partnership might collapse bringing more damage than good.
EMPLOYEES. My conviction is that the first person hired in the company should be a professional HR manager (even if part-time). By doing so you will eventually save yourself a lot of time and money by getting the right people from the very beginning. The right people will identify issues and find solutions before they even become a problem.
MENTORS. Finding a few aspirational mentors can be very powerful to stimulate your vision. While experts within an industry can give an in-depth insight on specific matters, I’d also recommend ‘getting outside the box’ and reaching out to people from other domains. My personal example is Buroka’s Freemium pricing model inspired by Spotify. The idea is that the basic service should be available to clients without high thresholds like a Setup Fee.
INVESTORS. Lastly, I am counting investors in HR section because at a startup stage you will most likely deal with an individual ‘angel’ investor who will support you. It’s crucially important that your ‘angel’ fully understands your plans and shares the vision. The 3 most important aspects here are:
(1.) Share the same long-term vision for the project and ensure understanding that patience is part of the process;
(2.) Create effective control and reporting mechanisms for your ‘angel’;
(3.) Be very clear and upfront about the total budget for the project and have funds locked down and available to you at all times.
Lack of either one of the above will hurt your business at some point, be it ‘angel’ wanting to see ROI (return on investment) prematurely or failing to deliver investment on time.
3. Banks and Payment Processors
Banks are notoriously bureaucratic institutions and the best guide to navigating you throughout layers and layers of red tape is your bank account manager. Make sure your business has a human face – meet and introduce yourself to your bank. Do not try to conceal or ‘sugarcoat’ your true business activity, the bank will find out eventually (after the very first transaction most likely) and then if you were not honest there’s no way to restore the relationship.
Apply certain amount of rigour to your accounts’ structure. I do recommend to operate a system of Segregated Accounts for clients’ funds even if you are not required to do so by your supervision authority.
On this, just a couple of basic rules which apply by definition to STP brokers and I strongly recommend all Market Makers (B-Book Brokers) should apply too:
(1.) Have a designated Client Funds Account.
(2.) Reconcile Weekly. This means to calculate the P&L and transfer profits into your Company Account.
(3.) Just like with personal savings – Save Up for tough times. In a B-Book model specifically, a broker has to maintain certain minimal capital to satisfy potential P&L drawdowns.
In case with a PSP (Payment Solution Provider) just like with banks I’d recommend using local licensed payment processors. They would normally have lesser fees than large international processors and you’d find them more responsive to your needs especially at the start of the business when you cannot boast large turnover on your accounts.
Using IT world jargon ‘Define your MVP’, where MVP stands for Minimal Viable Product. This presupposes construction of a logical framework of your technology at the most basic level that would allow you to start doing business ASAP. Of course our natural instinct is to ‘roll out’ the best version of our product/service to the market, however, the reality is counter-intuitive. You wouldn’t know exactly what your customers truly want unless you start testing and getting feedback from them. The core idea here is to start with a basic offering and once you have few clients on-board to start iterating and improving your business avoiding huge upfront costs and time wastes.
Once your MVP is defined you need to carefully scan the market and find the best Technolgy partners for your business model. There are countless great solutions but the reality is that you wouldn’t be able to afford them and most importantly you might not even need them upfront. Compare offers from providers with in-depth expertise and good customer support.
Own your domain and hosting. These are important assets which must be strictly in your possession. Do backups for everything. In internet business loss of data equals loss of business.
5. Managerial accounting
Know your budget. Whether you finance your project with your own means or attract investor capital, it is critically important to understand your present and future budgets to set up and sustain the project. I would strongly recommend avoiding the situation where you will be relying on a promise of financial commitment instead of funds being available upfront. Absolutely the last thing you’d want to happen is your investor to pull out of the project halfway leaving you with prospects of failure and potential liabilities.
Be pessimistic in your revenues calculation. It never goes smoothly in the beginning, you’ll be making mistakes and winning the first clients will be a mission. Pace yourself for a marathon, not the sprint and try to be as lean as possible financially. Build a cash flow which would be tailored to reinvest most of the profits back in the business development, marketing, and customer support.
A cliche saying ‘Think outside the box’ fits perfectly here. A startup project has no chance of competing for online clicks with the giants of the industry with deep pockets. My strongest advice here would be – think locally, be the best for a specific audience of clients in your target region to start with. Don’t worry about the rest of the world – become the best where it matters.
Part of thinking differently will push you to consider unorthodox marketing channels. Whilst building my first online business in Africa I discovered that the traditional Google and Facebook campaigns were not nearly as effective as communicating with the target audience via radio.
Get personally involved and build your business around your personal brand. Clients always want to know who is behind the business. A founder practicing transparency and integrity in his or her business will boost the customer confidence. Strong business oriented Social Media profiles are an absolute must for a founder.
Start off by carefully crafting your LinkedIn and Facebook profiles and move forward to building a solid online reputation in general. Hypothetically, if Elon Musk were to set up a brokerage firm, it would not struggle with customer acquisition simply because of the solid reputation of the founder. As the old saying goes ‘people buy from people’.
7. Customer Care
Focus on speed of deposits and withdrawals. This tip is worth an ‘ounce of gold’. Customers will judge you primarily by the way you handle their money. Make sure these two operations are pitch-perfect beyond all else.
Without an understanding of financial markets, online trading may be akin to gambling. This is bad because it doesn’t create a bond of continuous interest and engagement. To be successful a broker must educate their customers and navigate their journey – teach them about risk management and market patterns, show opportunities and warn about the pitfalls. Most of our successful startup clients are educators and trainers who have customers’ best interest in mind.
I have covered a few essentials in this article. Obviously, there’s plenty more you will discover along the way. I am happy to become a mentor to a serious and passionate entrepreneur and share my knowledge and experiences.
How to Deposit and Withdraw at Crypto Casino Crashino?
Playing at online casinos might be your go-to favourite fun time during the day, but did you know that you can use your crypto to play as well? Crashino is the next generation of online casinos! Learn how to register, deposit, and withdraw from Crypto Casino Crashino. This is a very easy and step-by-step guide on how to make your deposit at Crashino with Crypto.
HOW TO CREATE YOUR CRASHINO ACCOUNT?
1. Go to Crashino.com
2. Click on Register Button
3. Enter your email address and password
4. Choose your preferred FIAT currency (USD/EUR)
5. Click on the SUBMIT button
6. Now you are registered already, and you can take the Crash rocket to the moon!
Now it is time to transfer your crypto to Crashino and start playing! If you don’t have crypto yet, you can go to Binance or any other respected crypto wallet and buy crypto easily.
You can choose more than 12 cryptocurrencies to deposit with, you don’t have to think about their price volatility. While you play at Crashino, you play with your preferred FIAT currency that you chose upon registration. Only once you make your withdrawal do you need to choose which cryptocurrency you would like to cash out with.
Please choose USD as account currency and deposit with USDT if you want to stay away from the volatility big time.
HOW TO DEPOSIT AT CRYPTO CASINO CRASHINO?
1. Click on Deposit Button
2. Click on the Nomipay icon
3. Choose the Cryptocurrency you prefer to use
4. Enter the amount you wish to play with and click on Submit
5. Now, you are redirected to the Nomipay page with the depositing address.
6. Send your crypto to the address, and it will be transferred to your account!
You can use the QR code to scan your wallet and make your deposit there, or you can copy the address from this page and make the transaction in your crypto wallet to this address.
You can choose from any of these cryptos at Crashino: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE), Tether (USDT), UsdCoin (USDC), BitcoinCash (BCH), Solana (SOL), Binance (BNB), Dai (DAI), Shiba (Shiba), Tron (TRX)
HOW TO WITHDRAW YOUR WINNINGS FROM CRASHINO?
1. Click on your account icon
2. Navigate to My Wallet and Withdraw section
3. Choose the Cryptocurrency you prefer to use for cash out
4. Enter the Crypto Address you wish to send your withdrawal to
5. Enter the amount you want to cash out
6. Click on SUBMIT button
Now you have already requested your withdrawal. Please keep in mind that it can take up to 24 hours for your withdrawal to be processed, but usually, it’s much faster.
As you can see, it is very easy, it is to deposit and withdraw at Crashino, and you can use your crypto to play and win big. Start today by joining the Welcome Mission and get an amazing bonus of 100 Free Spins on top.
Can You Win Real Money by Playing Crypto Slots?
Introduction to Crypto Slots
Crypto slots are a form of gambling machine that lets you take a chance with digital currencies. They’re reminiscent of old gambling machines, but they do have a surprise ending: you can bet your money using cryptos. This tends to make them an appealing choice for those interested in betting on Bitcoin or various other cryptos. The possibility of big wins has been one of the factors that make crypto slots quite thrilling. At a certain crypto slot machine, numerous players have won progressive jackpot valued at hundreds of dollars. There are a variety of jackpot sizes available, and they continue to increase as more players play them.
Is Playing Crypto Slots Legal?
In general, there are no laws that specifically apply to crypto slots. It is neither permitted nor prohibited by law. Authorities’ perspectives on cryptocurrencies are swiftly shifting, with more nations adopting a favorable stance and debating how to regulate them specifically as well as blockchain-based businesses in general.
Authorities in nations where gambling is outright forbidden, like the United States, may yet impose severe penalties on gambling websites and/or bettors who utilize cryptocurrencies. A few international gambling jurisdictions have already granted licences to casinos that accept cryptocurrency, implying that they accept responsibility for cryptocurrency operations on gambling websites. You can check out the top crypto slots sites listed in CryptoNewsZ’s gambling section.
Can You Win Real Money by Playing Crypto Slots?
They’re generally free-to-play, and if you hit it big on a cryptocurrency slot machine, you can cash out your prize money without having to pay a casino fee. It’s no surprise that people are increasingly preferring to play with cryptocurrencies rather than real money.
Tips to Play Crypto Slots?
There’s a little research you can do to improve your likelihood of victory when playing crypto slots. Here are some pointers to get you started:
- Select a reputable gambling establishment. Not all casinos are the same, and some have a better reputation than the others. Before you choose a casino to play at, make absolutely sure you do your homework.
- Go over the terms & conditions with a fine tooth comb. This is extremely true when it comes to crypto slots, as these games may have their own set of rules. Before you start playing, take the time to understand what you’re getting yourself into.
- Play responsibly when gambling. Because crypto slot machines can be habit forming, set boundaries for yourself and don’t risk too much more than you can stand to lose.
- Bonus seekers, do your homework. Some casinos have good bonus payments than in others, so do your research to see which one has the best possible deal prior to actually registering and dumping money into the account.
- Keep a close eye on the jackpot in the game. Most of these games have jackpot games, which means that the prize grows as more people participate. These aren’t the games for you if you’re hoping for a fast win. However, if you have some spare time and would like to try your luck at winning a reality-changing prize, keep a sharp eye on the jackpot.
- Practice with the demo before wagering real money. A few crypto slots give a free-play mode, allowing you to practise without risking any of your own finances. Before you begin placing bets, you could use this time to familiarise yourself with the game, figure out which strategic plan works the best, and estimate your prize earnings.
Related Article: Best Crypto Gambling Sites
Benefits of Playing Crypto Slots
Among the most compelling reasons for players to use cryptos are the unmatched advantages they can provide, such as instantaneity, security, and Internet of Value. Nevertheless, there are some advantages to using cryptocurrencies such as bitcoin and Ethereum to play slots. Many players would prefer confidentiality when they play – for example, folks who don’t want their betting history scrutinised when getting a mortgage! Players can also have complete anonymity when using blockchain-based currencies because they don’t have to provide any personal information other than their wallet number to connect their online casino account to their cryptocurrency account.
You must make sure that your payments are safe in order for no one else to gain access to the account and withdraw your prize money. In contrast to the traditional payment options, where you won’t see your money in the account for 3-5 business days after drawdown, cryptocurrencies provide amazingly fast and even immediate withdrawals, allowing you to enjoy your winnings sooner. With Blockchain technology and crypto-casinos, you could indeed play from anywhere in the globe. Low or no service charges are yet another added benefit of using crypto because there are no 3rd-party service costs to pay and also no payment restrictions.
Crypto slots are a form of gambling game that generates different numbers using blockchain technology. They’re a new take on traditional gambling machines, giving the players so much more control over their wagers because the figures aren’t generated by a single company or person. Crypto slot machines use random number generators to generate their outcomes, there is an element of luck engaged, but you can improve your likelihood of victory by planning how much you wager for every spin as well as which kinds of slot games to enjoy.
4 Tips for Managing Your Emotions When Trading Crypto
Dealing with emotions is a natural part of being human. How you feel can significantly impact the world around you, and that is an indisputable fact in life. However, the world of cryptocurrency trading can be an unforgiving place for the overly emotional. If you let your feelings cloud your decision-making, you risk selling too early, running losses, and missing out on significantly profitable opportunities had you stopped for a moment and thought the matter through with a clearer headspace.
For example, after hearing some concerning rumors, you rashly decided to empty out your XMR wallet and other crypto exchanges for fear of losing money. After some time, however, the prices bounce back higher than before, which is a cause for dismay because you lost all of your investment due to a rash decision on your part.
Hence, it is crucial to keep your emotions in check when trading. This is especially the case when you are trading in an extremely volatile industry such as cryptocurrency. The crypto market is notorious for its constantly fluctuating values and massive price swings. It can strike fear, panic, and greed in the least suspecting and cost you more than what you bargained for.
Whether you are new or experienced in dealing with crypto, managing one’s emotions is a must-have tool in your trader’s toolbox. To help you master this skill, here are some tips to keep in mind as you traverse the wild, harsh landscape of crypto trading.
Develop a Risk Management Plan
Risk management is an integral part of any kind of investment venture. You want to ensure that you have backups in place in case a situation arises that may threaten your initial investment. However, many new traders overlook the importance of considering their emotional responses and their risk tolerance when formulating their risk management plans. As a result, their plans crumble in the face of high-pressure situations.
As such, always consider your risk tolerance when developing a plan to mitigate trading risks. In fact, many trading consultants use it as a basis for forming your trading plan. By doing so, you can ensure that you are only taking on what you can handle emotionally as you work your way to reaching your financial goals. Over time, as you become more experienced and more in control of your emotional responses, you can decide to take on more risks.
Conduct In-Depth Research
One of the most effective ways to handle frantic feelings is to counter them with cold, harsh facts. Aside from your risk management plan, it is wise to conduct some research on your own that can substantiate or debunk any concerning news or rumors that might cause you to buy or sell on an impulse. For example, after hearing from another trader that one of the digital coins you invested in has died due to a lack of community support, you might be tempted to liquidate the entirety of your investment. However, after some digging, you determined that the community is still active and invested in improving said cryptocurrency.
It is also important to do your homework when picking which coins to support. Make sure to check the cryptocurrency’s whitepaper and the developers’ activities for a clearer idea of the coin’s potential. In this manner, you can feel assured that your investments have a high potential of bearing fruit in the future.
Do Not Obsess Over Market Charts
Many traders new to the crypto industry fall into the trap of obsessing over market charts. The constant flickering of colors and lights can be hypnotising to the unaware. They watch price fluctuations all day to ensure that they can take note of sudden price hikes and dips, which may lead down a path to profitable opportunities.
However, this method is not helpful to your mental and emotional health. Indeed, it can feel like an emotional rollercoaster watching prices go up and down continuously. Processing significant amounts of information for too long can wear you down over time and may instead cause you to decide poorly when an opportunity arrives. Thus, a word of advice: do not let the market chart take over you.
Take Advantage of Limit Orders
Signing into your crypto exchange after some time and learning that the value of your investment has plummeted is a reasonable fear for many traders. After all, it is not healthy to watch market charts like a hawk, and in the crypto space, so many things can happen after a short span of time. Fortunately, many crypto exchanges have stop-loss features. This is a feature that automatically sells your coins once their prices decline to a certain value. In this manner, you can feel assured that your investment remains intact, assuaging any fear or worry you may have while not on the crypto exchange.
Removing emotions from any decision-making process that you make is almost impossible. In a highly complex and volatile market like cryptocurrency, conquering your initial emotional responses and maintaining a clear head is a skill that you have to master through experience. By doing so, you can keep your eyes on the prize and trade in a manner that is most helpful to your needs.
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