Finance Magnates spoke with an AAFX Trading representative to understand more about the group's business model and strategy for navigating an increasingly competitive FX industry. With several asset classes on offer, AAFX Trading has quickly made a name for itself, while also consistently meeting its client demands. See what the group had to say.
How does AAFX stay ahead of others in what has become a highly competitive and dynamic retail industry?
AAFX Trading team strongly believes in two ideas. Firstly, we all think that when a company is not improving, it inevitably starts regressing. You can't simply stand still and keep your position in this business nowadays. Technologies, customers' expectations, assets - all these things and a lot more change every day. We do our best to keep our tools and offers up-to-date. For example, we immediately added Bitcoin to the list of assets when we felt the increase of retail traders in Cryptocurrencies . The other fundamental idea that we base our business on is that the customer stands in the center of our approach. There is a procedure of customer identity verification commonly known as KYC. For AAFX Trading Know-Your-Customer is not a mere international regulation that we must implement in business to avoid troubles with money laundry attempts. We really want to know who our retail customer is. What are his or her preferred assets? Trading style? What troubles our customers can face and how can we help resolve those? As you might already know, AAFX is well-known for its fast and professional technical support. We are proud that our clients get answers to their questions within 20 seconds most of the time. Chat logs with support also help us analyze customers' needs and requests. We pay attention to what bothers them mostly and implement our findings in the business offer. As an example, we understood that even though most retail customers don't usually use the leverage above 1:100, they all want to be completely free choosing the leverage level. This is why when our new clients start trading they can set up the max leverage level themselves. Technically there is a limit of 1:2000 leverage at AAFX Trading. In fact, we have never heard of a case when a retail trader would want more than that. This is how KYC and client- oriented approach work in our business.
What are the most popular instruments on offer at AAFX and do you see this or any other specific trends changing at the company moving forward?
The undoubtful leader among all the instruments is EUR/USD. For many years in a raw, this currency pair has been yielding the biggest turnover volume at AAFX Trading. On the one hand, EURUSD has got enough volatility to be attractive for day trading, on the other hand, this pair is not exposed to the risk of excessive response to fundamental news. In addition, we offer only 2 pips fixed spread for EUR/USD and an average 0.6 spread for this pair on ECN accounts. So there is no surprise it is a favorite one among our clients. The epic Brexit story has also attracted a lot of attention to GBP/USD in 2019. The rapid increase in volatility many traders perceive as an opportunity to profit above average on these moves. So this year the pound sterling was another leader in AAFX customers' rating. Last year we've also noticed some decrease in interest in cryptocurrency trading. The launch of Bitcoin CFD at AAFX was definitely a good idea as it totally corresponded to the expectations of our customers. However the crypto-industry is very hard to predict, so we have to keep abreast of the latest news. Trends change fast so we've got to be flexible and react fast to the new challenges and our customers' needs.
Has AAFX contemplated offering MT5 or what has factored into the decision to stay with MT4?
AAFX Trading always keeps it's trading tools and conditions up-to-date with the customers' demand. As long as MT4 was fully satisfying the needs of our retail traders till now, we kept focused on providing quality support of this MetaTrader product well known for its stability. However, we carefully monitor customers' feedback and requests. As long as we've noticed a stable increase in demand for MT5 support, we decided to offer MT5 since January 2020 for AAFX Trading clients.
What are some of the biggest mistakes multi-asset brokers can make and how does AAFX avoid these?
Forex brokerage services for retail traders really is a highly competitive industry. Many small brokerages can't compete with others offering tighter spreads and faster executions than industry leaders. Therefore they chose a multi-asset approach as a mean of differentiation. However, decentralized forex and CFD markets have to rely to the great extent on the internal brokerage Liquidity . Without sufficient liquidity, customers will face poor executions and won't be able to get their orders filled in full and in a timely manner. Before a broker decides to go multi-asset, it has to make sure they can keep quality of service on a satisfactory level. Unfulfillable promises will inevitably result in customers' disappointment. Such a situation is totally unacceptable for AAFX Trading where the quality of executions and customer satisfaction come in the first place. This is why we carefully consider the asset liquidity before introducing it to our clients. We try to find the balance between customer's demand for rare instruments and our ability to maintain the highest quality of orders executions for such assets. So far we manage fine and this keeps our position strong in the industry.
What does the future hold for AAFX in 2020? Are there any specific regulations, trends, goals the company is looking ahead to?
Since the first day of launch in 2014, the primary AAFX goal was to maintain the best quality service to our clients. This #1 goal remains the same for 2020. Speaking of upcoming events, this year will definitely be interesting in terms of cryptocurrency market regulations that are yet to be developed by most of the governments and international authorities. We also expect to hear more about Brexit's impact on the currencies market. Apart from that, this is very important for industry participants to keep an eye on modern technologies. New data transfer and storage solutions, trading platforms, artificial intelligence, rapid progress in machine learning these are all things that can both expose traders and brokers to new challenges and vulnerabilities or give some competitive advantages. We live in interesting times indeed and I wish everyone make the best use of the given opportunities.
