Top tips for becoming a foreign exchange trader
A look down any jobs board reveals that there are plenty of vacancies for foreign exchange traders both in London and around the world – and with the total size of the global forex market currently resting at around $5tn per day, it’s clear that this is a field that is likely to remain dominant for a long time to come. However, it’s not an easy ride: you’ll need to ensure that you’re highly numerate and commercially minded, for example, while for some jobs a degree is usually necessary. This article will explore what the requirements are, and how you can find your feet in this diverse and interesting career.
Education and experience
One of the beauties of foreign exchange trading is that you don’t have to hold a particular qualification in order to get hired in a relevant role. Some people set up as forex traders by themselves – and in theory, all that’s required to do that is a laptop, an internet connection and some cash to get started. However, studying for a degree can certainly help your chances, particularly if you’re looking for employment: banks and forex brokerage firms often recruit graduates because they possess the critical thinking skills to solve market problems and the verbal skills required to liaise with clients. Studies show that the financial services sector is the industry that takes on the most graduates of any in Britain, so having a degree on your side will certainly boost your chances. There’s no degree in Forex Studies, and people in disciplines as diverse as economics to geography can become forex traders.
Graduates of certain universities, such as those in the research-intensive Russell Group, are over-represented in these statistics – so if you’re eyeing a career in forex but you’re still at the stage where you can make decisions about what institution you attend, then it may be worth setting your aims high. Education doesn’t stop at school or university, though. Ongoing professional education using the many forex sites available online is a good idea, and trading forex with Forextraders.com is a good way to access resources and find ways to keep your skills sharp.
Numeracy and commercial awareness
Forex brokers don’t spend the whole day sat working out figures on calculators, and there’s a lot more to it than that – especially when it comes to developing good client relations. However, much of the work does require strong numeracy skills: forex traders often have the authority to buy large currency sums on behalf of the institution they work for, and being able to place these figures into their proper context and work out what goes where is obviously essential. Employers are likely to request that you demonstrate your numeracy skills in one way or another, so ensure that they are finely tuned before applying. Perhaps more important, though, is being able to analyse the commercial significance of a figure – and what it means for your employer’s bottom line. If you’re so figure-averse that you’d struggle to deduce whether a given amount represented a profit or a loss, say, then forex trading might not be for you.
Stay within the law
It’s also important to make sure that the firm you choose to work for is properly regulated. If you end up at a firm that doesn’t have that regulatory backing, then you may soon find that it goes out of business – and you could in turn be out of a job. It’s wise to always ask any potential employer whether they are regulated by the Financial Conduct Authority (FCA) or the relevant regulator in whichever country you apply, such as the Securities and Exchange Commission (SEC) in the US.
You should also be aware of the law. That’s because there have also been high-profile cases of forex firm employees who have been personally prosecuted as a result of their activities. British trader Stuart Scott, for example, even faced extradition to the US and being tried in a court across the Atlantic when he was accused of foreign exchange-related wire fraud. Spending some time now familiarising yourself with forex trading practices that are legal and those that are not is definitely a smart move.
Working as a forex trader is a career considered by many people who have both a nose for profitable deals and a critical, numerate brain. It’s a lucrative career, and it’s one that exposes you to a wide range of clients and other stakeholders. By ensuring that you’re degree educated, legally savvy and numerate, you’ll be able to give yourself the best possible chance of breaking into this world.