Risk management and your Forex brokerage
The most important ingredient in a brokerage’s success, besides a healthy dose of good luck, is proper risk management. In order to properly manage risk, in any given moment you as a broker have to completely and accurately understand your P/L—in real time.
A proper risk management system will allow you to see your complete and true exposure and be able to break it down and understand what your actual P/L is at any given time. Just like a quick glance into your on-line bank account, you should be able to see a real number of how much your brokerage is up or down.
Tracking overall exposure for your Forex brokerage
Few risk management systems are capable of providing you with an at-a-glance figure that will actually take into consideration all of the necessary factors that will produce an accurate figure.
LXRisk has a clever answer to this “exposure problem,” the P/L Tab. At a glance you can understand your total exposure to the market. The tab calculates your exposure via taking into consideration net P/L for A-Book, B-Book and directly against the market with market rates from Leverate’s LXFeed. You can even make manual corrections, such as if you refund money to a client. The P/L tab gives you the ability to slice data by instrument, traders, A-Book/B-Book/directly against the market, defined groups and more. Of course all of the data may be exported to a PDF or to a spreadsheet for easy reporting and data handling.