The Foreign Exchange Market (Forex) is the largest, most liquid market in the world, with as much as $5 billion USD changing hands on some days. Traders have numerous opportunities to make large amounts of money on currency difference, yet there is risk for everyone involved. In comparison to equity markets, Forex has always been considered something of a ‘Wild West’, with few regulations and many stories of scams and misdealing among brokers. Is Forex’s reputation deserved, or is it simply the result of negative publicity dominating the online conversation?
Forex and the Internet
In the past, Forex has been the province of banks and financial institutions that regularly need to exchange large amounts of currency. However, internet transactions have opened up speculative trading to a new class of investors. Anyone can create an account with a Forex broker and exchange currency with only a few clicks. Since there is no central marketplace, over-the-counter trades take place 24 hours a day, seven days a week and Forex is always active.
New traders see Forex as an exciting opportunity, but they aren’t always aware of the risks involved. Higher leverage than equity markets means there’s a lot of money to be made on Forex, however there’s just as much potential for high losses. Novice traders often want to go with their instincts rather than following a tested ‘trading plan’, yet without a thorough knowledge of the market, instincts are often wrong. First-time traders may find themselves betting long on a currency just as experienced brokers are pulling the market in a new direction.
Forex Brokers have a Problem and the industry needs a Reputation Makeover
The internet helped create the amateur Forex trader, yet it also continues to perpetrate the field’s negative image. The risks of the game are one of the main reasons bad publicity dominates when it comes to Forex brokers. Disgruntled traders usually blame the broker when they lose money. However, negative comments complaining of market reversal, price ‘slippage’ or stop hunting aren’t evidence of broker dishonesty; they are a regular part of the Forex market. Experienced traders often lose money on unpredictable fluctuations, yet they know that tomorrow they are just as likely to make that money back.
There are dishonest Forex brokers who try to boost their commissions by creating a high-trade environment even when this isn’t in the client’s interest, but this is the exception rather than the rule. Regulation has improved over the last few years, and bad brokers are quickly weeded out since Forex firms need long term clients to build their business.
Yet this hasn’t changed the market’s online profile, which is still dominated by stories of scams. To make matters worse, Forex brokers seldom brag about their profession. Earning £500 one minute doesn’t mean much when the next round of trading could just as easily go the other way.
Reputation Management Can Help
At ReputationDefender, building a reputation is our business and today’s Forex firms are in need of solutions. Some issues come down to basic customer service. Failure to respond to questions and lack of transparency about the trading process leaves many traders suspecting a scam where none exists. Clients should feel they can turn to the broker with any issue and know that it will be resolved satisfactorily.
Top Tips for Forex Brokers
- Claim your domains
As well as ensuring your company can be found in search engines, building a strong online brand reduces the chances of falling victim to a reputation crisis. By claiming your domains you are keeping control of your brand identity, pushing down unfair, inaccurate or misleading content.
Social media domains like Facebook, LinkedIn and Twitter should be included in the roundup, but it’s recommended you look beyond the obvious three.
- Promote those domains
Once you have all these domains make sure you put them to good use! Drive traffic to your main website by embedding links on your social media accounts. This means that however customers find out about you, they’ll be able to see your official website.
- Create custom content
It is essential to regularly post interesting, relevant and optimised content to your social media accounts and blogs. Doing this will boost your credibility, engage your customers and potentially win you new ones.
- Safeguard your reputation
Putting in place social media best practice guides and crisis plans can be invaluable in preventing and rectifying PR disasters!
Stay up to date with what is being said about you, your employees and your brand on external sites. Too many people forget to monitor their own online profile until it is too late and negative press begins to dominate. Proactively monitoring your online reputation will give you time to organise an appropriate strategy or response should a crisis occur.
- Ask the experts
To achieve the best results, professionals utilise multiple techniques to manage their clients’ online presence. ReputationDefender® have been managing online reputations for over 10 years; our expertise can set any business on the right track, even before their reputation has become an urgent issue.
Download your free reputation Kistarter guide here