When you want to change your dollars to pounds, euros or any other foreign currency, you might need the services of a forex broker or foreign exchange trader. Although many banks offer this service, forex brokers often provide a fast and hassle-free way to convert your money.
So, what else do forex brokers do and what qualifications do they hold? Read on to find out.
What Do Forex Brokers Do?
The primary duties of forex brokers include:
- Buying foreign currencies from banks, financial institution and individuals
- Selling currencies to clients
- Monitoring the factors that affect rates of exchanges in several economies
- Creating business contacts with other players in the industry, such as financial market analysts
- Making projections on the performance of various foreign currencies and advising clients accordingly
- Maintaining records of all currency exchange transactions
Unlike banks which typically operate during the day, forex brokers work day and night. Hence, many brokers work on a shift system.
If you’d like to enter this profession, be prepared to work in a fast-paced environment complete with modern computers and high-speed internet. You will spend most of your time analyzing graphs or on the phone talking with clients.
The following table illustrates typical annual salaries for forex brokers:
Level of Seniority
Lowest earning forex brokers
$39,000 - $52,000
$52,000 - $110,000
$110,000 - $150,000
To qualify for employment as a forex broker, you must earn a bachelor’s degree in any of the following fields:
Although you can be hired as a fresh graduate, many employers prefer individuals who have some trading experience. It is, therefore, advisable to focus on finding a job at a company that provides financial services, after graduating.
To improve your chances of standing out among other prospective forex brokers, you should study one two foreign languages.
Depending on your state’s regulations, you may be required to obtain a financial license to practice.
A blend of the right education and the right skills will make you a competent forex broker. Focus on developing the following skills and abilities:
- Superb communication and customer-service skills
- Strong interpersonal skills
- Excellent math skills
- The ability to think quickly and make accurate decisions
- Good risk management skills
- Good skills in financial analysis
- Good teamwork skills
- An interest in staying abreast of changes in the financial industry
After landing a job, your employer will take you through on-the-job training, mainly to help familiarize you with his or her currency exchange software and systems.
There is a notion that traders are born, not made. So pursuing advanced qualification cannot add to your competence. This is not correct. Pursing a master degree in finance, for example, will significantly enhance your knowledge of international financial markets, making you more qualified to secure senior jobs.
You can also pursue any of the following certifications to boost your progression prospects:
- Chartered Market Technician –Offered by the Market Technicians Association
- Chartered Financial Analyst – CFA Institute
As a newly qualified forex broker, you will begin by working for an established forex brokerage firm or other financial institution that provides currency trading services.
After gaining vast experience and the industry networks to run an independent business, you can establish a forex company. If you are not interested in venturing into self-employment, you could be hired as a forex trading manager by a commercial or investment bank.
From 2012 through to 2022, the Bureau of Labor Statistics estimates an 11 percent job growth for all financial services sales agents. Although this equals the average growth for all jobs, aspiring forex traders can expect to have plenty of employment opportunities. This is because the U.S. dollar is the most widely used currency -- so many foreign investors will need the services of forex brokers.
If you have a knack for numbers and an interest in financial markets, this may well be the right career for you!