Forex Trading involves high risks, with the potential for substantial losses and is not suitable for all persons. Past performance is not necessarily indicative of future results.
A most often seen disclaimer at any forex or options trading broker’s website and a couple of affiliate websites as well. Yet, despite the warning the forex industry continues to grow. The global foreign exchange market turnover was 20 per cent higher this year (2010) with average daily turnover of $4 trillion than it was three years ago. The findings of the triennial central bank survey of foreign exchange and derivative market activity of Bank of International Settlements (BIS). This survey covered the turnover in April 2010 as reported by 1,309 market participants in 53 countries and financial centres.
So, it’s no surprise why the forex industry seems a lucrative business. As of today the lure of the forex industry has given rise to quite a couple of Retail Market Makers, also known as Retail Forex Brokers. Perhaps an easier way to help you understand the ‘Retail Forex Broker’ is someone from the likes of eToro, or FXCM or GFC Markets.
Before going further, the following topics below will help give you a more clear understanding of the forex industry:
History of forex trading: Gives an insight into the history of forex trading and builds the base for understanding the forex industry.
Forex Regulators: This article explains the differences between regulated and non-regulated forex brokers and also details the various regulating authorities across the globe.
Venturing into forex affiliate marketing
Before we discuss this topic, there are certain assumptions that need to be made about the reader. It is assumed that you are already active in the affiliate industry, so you have your established channels of communication and promotion of the merchants you work with.
So the first question that comes to anyone’s mind is, how do you target the traffic for forex traders if you are in a different industry all together. Well, there’s no over-night miracles that would see you profit from switching to forex. As an affiliate you sure would know the hardwork it takes. Forex affiliate marketing, on a very high level isn’t much different from any other industry in affiliate marketing.
Even if your website attracts tons of traffic, placing a forex or trading related banner would perhaps generate lots of clicks but not much in conversion. Quite often there are many debates, fuelled further by financial retail brokers targeting affiliates from the gambling industry. While each side of story has it’s own justifications, one needs to understand the mindset of a forex trader.
First of all, most retail brokers offer different kinds of trading accounts. Ranging from standard or micro accounts to volume trading accounts and more. Each of these type of accounts cater to different levels of forex trader and the minimum deposit amounts.
Obviously, just because your present affiliate marketing efforts pay off well doesn’t mean you would do just the same in Forex by placing banners or content.
One needs to understand that given the complexity of the forex industry, anyone wanting to invest would make an educated and informed decision. Providing such information (useful) is where an affiliate needs to start from. Assuming that an affiliate enjoys a good amount of loyal members to their website, in order to convert them into forex/finance trading, you need to inform your website visitors on the advantages of investing in forex.
During one of the forex affiliate webinars at ForexAffiliates Review, the speaker mentioned that keywords such as ‘make money online’ seem to work great for affiliates targeting the forex industry. True as it may be, if you expect your average targeted visitor to deposit say $1000 in a finance product simply because they stumbled upon your site for ‘make money online’ just doesn’t make sense.
Let’s face it. Forex is complicated, unlike it’s distant relative, Gambling. There are factors ranging from leverage, spreads and commissions and even more that influence a customer sign up. And dig a bit deeper and a newbie would surely be lost in the jungles of candlesticks, technical, fundamental analysis and so on.
Having informative articles, coupled with good support from the retail forex broker you promote will work wonders. Some forex brokers if not all offer demo or practice accounts for newbies to get acquainted. Some even go further and offer free money to trade/test the trading platform. Mix the two together.. namely, theoretical information coupled with a demo of the product without having your visitor to invest a penny forms a good starting point.
One of the advantages of being a forex affiliate is the fact that you can easily build your own membership or audience if the information you provide is useful and easy to understand. This draws the onus on the forex affiliate to perhaps educate themselves first before they embark on a traffic hunting spree.
The other aspects such as keywords, backlinks are surely something a seasoned affiliate is well aware of, so we won’t delve much into this. The forex affiliate marketing provides affiliates with a host of tools, also known as widgets that can be used to engage your website traffic. Tools ranging from live currency pair rates to live economic calendars. Using such tools definetly give a boost to your efforts.
Better be safe than sorry. The old adage proves quite true when it comes to promoting retail forex brokers. A recent example can be the case about 10Pips, which shut down it’s affiliate doors overnight and the product itself. As an affiliate one can only wonder the amount of damage it would do to an affiliate who would spend weeks on promoting a product only to see it go down the drain literally.
Due research on the retail broker that you promote helps in preventing such unforeseen incidents. But even then, nothing is set in stone. However, the last thing an affiliate would want to deal with is the leads one refers and dealing with their problems.
Free v/s Deposit Bonuses
As many white label companies crop up in the retail finance industry so do many retail brokers. The markets are getting competitive given the number of retail brokers that offer some kind of incentive to sign up. So the question arises, does it make sense to promote a forex broker that gives away free money?
There are two sides to the coin on this one. One would argue that it gives a good option for prospective customers to test the system in real time, the flip side of this is the bonus hunters or traffic that sign up just to get a ‘feel’ of the system.
Further reading on this topic is available at Free v/s Incentivized promotions
In conclusion, the best way for an existing affiliate to switch or promote forex affiliate programs would be in educating the audience, coupled with promoting the right forex broker. Remember, forex trading is an alternative investment method and people who wish to trade would definitely read up before they invest. By providing resources as such would help not only in increased conversions of your website traffic but will also enable you, the affiliate or a webmaster to connect more with your website visitors.