In the trading world, every participant aims for profit: it is as
true for brokers as for retail traders. However, the trick is that positive
outcomes in the long term are only possible if the relationships between a
broker and its clients are mutually beneficial. Experts at Octa, a globally
regulated and trusted broker since 2011, explain why, for a broker, aiming for
reliability and client trust is more profitable in the long run than
questionable business practices that may bring fast gains.
The role of reputation for brokers
For most global financial brokers, the entire business model
depends on clients’ ongoing participation. The higher the volume traded by
clients, the higher the broker’s profits. This is why, in the world of trading,
reputation is everything.
A broker that operates according to best practices in terms of
fairness and transparency establishes a high level of trust from the get-go.
This is a significant advantage that can’t be matched by dubious tricks or
chart manipulations, such as price distortions or slippages. In turn, traders
who suspect that price charts have been intentionally changed or that
information has been presented in a misleading way will not engage with such a
broker for long.
Moreover, suspicions of unsound practices often spread rapidly
among trading communities, damaging the broker’s reputation. By contrast, a
broker providing clients with reliable price feeds, transparent trading
conditions, and clear information on market mechanics builds credibility,
translating into consistent long-term profit.
Brokers cooperate with regulatory authorities to avoid various
manipulations and establish sustainable and ethical practices in the trading
industry. By meeting the requirements of regulatory bodies and obtaining the
respective licences, brokers show that their processes are on par with the
benchmarks, and their clients can safely trade with them.
Why engaging in manipulations
doesn’t pay off
While questionable practices like price slippage and chart
manipulations may provide a temporary gain, it is a shortsighted approach for
any experienced and large broker. Altering price graphs or creating
misconceptions about execution speed and spreads can result in short-term
revenues from clients who lose more quickly. Yet such practices guarantee high
client turnover, regulatory scrutiny, and the eventual collapse of trust.
Transparency, on the other hand, creates a steady flow of trading
activity. Clients who know they are operating in a transparent, regulated
environment are more likely to trade successfully and remain with the broker
for years. It is the key consideration for any broker, since the broker’s
profits come not from exploiting clients, but from fostering their growth and
encouraging their continuous engagement with the platform.
KYC and AML procedures
To achieve transparency, trustworthy brokers use the processes of
know your client (KYC) and anti-money laundering (AML). At this point, both of
these protocols have become the golden standard of the financial industry—and
for a good reason. These are not simply requirements imposed from the outside,
but core pillars of reliability.
The KYC process ensures that the broker understands who it is
dealing with and confirms that the trader’s identity and source of funds are
legitimate. This set of measures protects the broker from fraudulent activity
while assuring traders that the community they are part of is genuine and
secure.
In turn, AML procedures safeguard the trading platform from
becoming an exchange for criminals. By strictly monitoring deposits and
withdrawals, the broker reflects its stance on maintaining integrity. When
traders see these processes handled responsibly, they understand that the
broker values legality and security over quick, unscrupulous gains.
Conclusion
At the end of the day, successful brokers easily decide between
manipulation and transparency. The latter is legitimate and fair to traders and
is more sustainable and profitable in the long run. Manipulative practices may
generate short-lived income but always lead to reputational damage, client
mistrust, and legal consequences. On the other hand, transparent, fair, and
well-regulated e-brokerage practices foster long-term trading activity, client
retention, and steady profits.
Disclaimer: This
article does not contain or constitute investment advice or recommendations and
does not consider your investment objectives, financial situation, or needs.
Any actions taken based on this content are at your sole discretion and
risk—Octa does not accept any liability for any resulting losses or
consequences.
About Octa
Octa is an
international broker that has been providing online trading services worldwide
since 2011. It offers commission-free access to financial markets and various
services used by clients from 180 countries who have opened more than 61
million trading accounts. To help its clients reach their investment goals,
Octa offers free educational webinars, articles, and analytical tools.
The company is involved in a
comprehensive network of charitable and humanitarian initiatives, including
improving educational infrastructure and funding short-notice relief projects
to support local communities.
Since its foundation, Octa has won
more than 100 awards, including the ‘Most Reliable Broker Global 2024’ award
from Global Forex Awards and the ‘Best Mobile Trading Platform 2024’ award from
Global Brand Magazine.
This article was written by IL Contributors at investinglive.com.