1. Have you ever tried google for a start? Maybe wikipedia or investopedia?

2. Costs of what?

3. Depends on regulations, but in most cases you are required to have a capital to protect your clients. What you refer to in this question sounds more like a margin requirement.

4. 100K to 1M depending on the legislation. However note that most of the "affordable" fx brokerages are bucket shops, and therefore the only hedge the net position using a prime, and I'm not sure which kind of a brokerage you'd like to run.

5. This is possible if you are not a broker, but an introducing broker. I think in your position it could possibly the best way to start in this business.

6. Don't understand the question.

7. Yes, for example in UK you're required to have all client funds in segregated accounts.

8. I do encourage you to use google to find information on so non-specific topics.

1. Yes, I have ever tried google and I ended up with the questions.

2. Bp, PoP, CP or LP classify his clients upon their deposits and/or volumes, and upon that they determine what Spreads they will give him, what slippage, what commissions and what swaps. I want to know the Transactions Cost Analysis in another word.

3. Margin requirement. So if I have 100:1 leverage , I need 1 in capital to deposit with them?

4. I want to be "affordable" but not a "bucket shop".

5. Are there still clients who connet with an IB unless you want me to run a bucket shop.

6. I want to let the client deposit/withdraw from his local bank from everywhere although Bp, PoP, CP or LP is another one. The one idea for that is to sync between his account with provider and local bank. Have you heard about if that is available or accepted within providers?

7. Uk and other countries guarantee your funds provided not exceeding a limit, but above that limit they don't guarantee.

In UK example, they guarantee like 87k or something near that only. I ask about guarantee "in full".

8. As I said above, I did search it in depth but there is no much info to take. All says you need a lawyer even the regulatory governmental body!

Thanks Alex.

You need a consultant, not a lawyer. Or invest a really lot of time.

That's why I am writing here in LinkedIn to get some clarity.

the way i see it if i had to excude your project i will run a cfd business. contracts for difference are off balance sheet products for two main reasons. first i don't deal with rules related to underlying instruments and second i deal only only on the performance of the asset and not it's plain value.

you might want to offer leverage to your clients for that you need to bechmark on the other brokers margins levels.

your clients money and margins are in a third party account so they are free from your own bankruptcy. for the third party you need insurance for amounts above those offered for deposit accounts.

you run a trading book offseting clients position and hedge only the balance for that you need enough capital but much less than if you deal with underlying.

as an example igmarket use segragation and money received from clients are spread in a portfolio of banks. hedging is done with ig own capital

How to become a FX trader??

The same way you did to become a good senior analyst. First focus on one or two pairs, say EUR/USD (Europe Vs USA) and JPY/USD (Asia Vs USA). Do your analyst thing then open a fictitious position, track it and see how you do. Start from there and learn.

By learning i mean: read forums, most of the time you won't find anything interesting (the level of analysis is rarely good but you find some few nice gems) but you will learn keywords and soon you will understand most of what you read. Second observe how market react to data and note the difference with your own analysis. Third when you see that you'are making money more that 6/10 times (consistency) then you will learn something, at your expense, fictitious trading is so so different than real trading! At that moment starts your real journey (most traders are broke in 6months to 3 years)

Once you have a real account it boils down to having a plan (entry points, exit points, sizing/volume building, rules for adjustments). You need to have a plan before opening a position not after, stick to rules for adjustments once the position is opened (you should basically run in automatique mode once the position is opened). Then simply keep track of how you do and as IT engineers do track and upgrade (fixing bugs). To end my answer i would say split your money to each trade (allocation) in order to allow yourself to play enough the game to have a chance to fix enough bugs and start making some money

for point 3 and 4 see the message above (boils down to negociation). the level of your capital is a function of your portfolio net position and margin level granted by the bank. example say your clients buy 10 million dollars of goog and some others sell 11 million dollars of goog your net position is short 1M dollars of goog, if your marging is 10% you would need 100K dollars. If you use CFDs (contracts for differences you will have less money to lock as you deal only on performance and not the plain price)

point 5: as i said you trade your net position and hence the commission is function of what you negociated with your own broker (nothing to do with your own clients whatsoever)

6. like Alex i don't get it

7. like Alex said clients money are in segragated accounts and protection is to the same level granted buy the state and any above that level need to be protected using your own effort (buying insurance if possible or using CDS, credit defaults swaps if possible). For that point you should simply do what your competitors do and don't overdo it

6. see definition of segragated account and you will get your answer

1. Form a Team with FX Business Analyst and FX Developer I guess you can do it and Talk to both Buy Side and Sell Side if they are ready to match in your system open the system and map all the Post Trade and Credit Relationship that will close the Gap of Both PB and Clearing House

Thanks for participations and private messages. Questions still need answers. Professionals are invited to give their deep experience.

1. What is prime broker, prime of primes, counterparty, liquidity provider and clearing house;

2. Will transaction costs be decreased if one has two separate relations: one with a clearing house and the other with a Bp, PoP, CP or LP, or its the same when that Bp, PoP, CP or LP has its own clearing department;

3. When opening a relation with Bp, PoP, CP or LP, will the capital they require be from us, or from our clients, if we only want STP module with leverage "from 10:1 up to 400:1";

4. What is the typical least capital needed;

5. Or there is no capital needed, but those Bp, PoP, CP or LP will give us the scale upon which they deal with us, so if your clients deposits are in X category, spreads and commissions will be X, or if your clients volumes are in Y category, spreads and commissions will be Y; AND

6. Is there a legal way we can guarantee the clients trading net funds "in full" in case of a bank bankruptcy.