Authored by Lee Wright in Stock Trading
Published on 12-19-2009
Forex (Foreign Exchange Market) trading can be one of the most lucrative financial industry careers. The opportunity to trade currencies on the Forex market can lead to substantial financial gain. It is a fast growing industry so the career advancement potential is excellent. The keys to becoming a Forex broker are education, professional certification, and state licensing.
In order to become a successful Forex broker you need a thorough background in economics, finance, and investment analysis. Although a college degree is not required, college level knowledge of these subjects is necessary to understand the foreign currencies markets and be able to advise clients appropriately. Careful research and extensive reading in these fields can be as effective as a college education provided you have an in depth understanding of investment and currency markets. One productive way to learn about becoming a Forex broker is getting in touch with a current or retired broker and asking about the daily routines and knowledge required for the job. Online Forex discussion groups can also be a valuable source of knowledge for a prospective Forex broker.
The purpose of the Foreign Exchange Market is to allow banks and businesses to trade foreign currencies. It is the largest and most liquid financial market in the world. Forex brokers are responsible for trading currencies for clients using various market tools such as spot transaction, futures contracts, and currency swaps at favorable exchange rates to maximize the client’s profits. The best Forex traders have extensive knowledge in many areas that affect investment markets including fiscal policy, government budgets, balances of trade, surpluses and deficits, inflation, market stability, political condition, and market trends. They use this knowledge much like stockbrokers to judge the most advantageous moment to make a trade and maximize client profit.
Due to the complexity of the Foreign Exchange Market Forex brokers must be professionally certified to trade currency for clients. Professional certification for Forex brokers requires passing the National Association of Securities Dealers Series 3 test. You can find test preparatory material online, but to take the test you have to be sponsored by a licensed futures brokerage firm. In addition to this test, most states require Forex traders to have a state license. The requirements vary from state to state and may require mandatory seminars and testing. Some Forex trading firms have merged with futures trading firms and you may have to obtain state license as a future’s trader as well.
With the advancement of technology, the jobs of some Forex brokers are becoming increasingly focused on the information technology aspect of foreign currency trading. A working knowledge of online trading platforms and the current use of technology for trading and investing is essential for a successful Forex broker.
Becoming a Forex broker can be a very financially rewarding career. In addition to the commission earned from investing money from clients, the knowledge and experience learned from Forex trading can help you increase you own personal investments. With the proper education, professional certification, and state licensing you can become a successful Forex broker.