The forex markets can be an exciting and lucrative market to trade if you thoroughly understand how to buy and sell currencies. If you're drawn to this area, you might even want to make it your career.
TUTORIAL: Forex Trading Rules
Forex jobs are fast-paced and can mean strange work hours and long work days since forex markets are open 24 hours a day, five total days a week. They require knowledge of and compliance with laws and regulations governing financial accounts and transactions. Some jobs require candidates to have passed one or more exams, such as the Series 3, Series7, Series 34 or Series 63 exams. If you are eligible to work in a foreign country, a career in forex can bring the added excitement of living abroad. No matter where you work, knowing a foreign language, particularly German, French, Arabic, Russian, Spanish, Korean, Mandarin, Cantonese, Portuguese or Japanese, is helpful and might be required for some positions. (The forex market has a lot of unique attributes that may come as a surprise for new traders, check out The Forex Market: Who Trades Currency And Why.)
This article will provide an overview of five major career areas in forex. Keep in mind that specific positions tend to have different names at different companies.
1. Forex Market Analyst/Currency Researcher/Currency Strategist
A forex market analyst, also called a currency researcher or currency strategist, works for a forex brokerage and performs research and analysis in order to write daily market commentary about the forex market and the economic and political issues that affect currency values. These professionals use technical, fundamental and quantitative analysis to inform their opinions and must be able to produce high-quality content very quickly to keep up with the fast pace of the forex market. Both individual and institutional traders use this news and analysis to inform their trading decisions.
An analyst might also provide educational seminars and webinars to help clients and potential clients get more comfortable with trading forex. Analysts also try to establish a media presence in order to become a trusted source of forex information and promote the companies they work for. Thus, there is a large marketing component to being a forex analyst. (This market can be treacherous for unprepared investors. Find out how to avoid the mistakes that keep FX traders from succeeding, read Top Reasons Forex Traders Fail.)
An analyst should have a bachelor's degree in economics, finance or a similar area and may be expected to have at least one year of experience working in the financial markets as a trader and/or analyst and be an active forex trader. Communication and presentation skills are desirable in any job, but are particularly important for an analyst. Analysts should also be well-versed in economics, international finance and international politics.
2. Account Manager/Professional Trader/Institutional Trader
If you have been consistently successful trading forex on your own, you may have what it takes to become a professional forex trader. Currency mutual funds and hedge funds that deal in forex trading need account managers and professional forex traders to make buy and sell decisions. So do institutional investors such as banks, multinational corporations and central banks that need to hedge against foreign currency value fluctuations. Some account managers even manage individual accounts, making trade decisions and executing trades based on their clients' goals and risk tolerance. (If you are looking for answers, check out Top 7 Questions About Currency Trading Answered.)
These positions have very high stakes: Account managers are responsible for large amounts of money, and their professional reputations and the reputations of their employers ride on how well they handle those funds. They are expected to meet profit targets while working with an appropriate level of risk. These jobs may require experience with specific trading platforms as well as work experience in finance and a bachelor's degree in finance, economics or business. Institutional traders may need to be effective traders not just of forex, but also of commodities, options, derivatives and other financial instruments.
Regulators attempt to prevent fraud in the forex industry, and there are numerous ways to work in forex regulation. Regulatory bodies hire many different types of professionals and have a presence in numerous countries. They also operate in both the public and private sectors. The Commodity Futures Trading Commission (CFTC) is the government forex regulator in the United States; the National Futures Association (NFA) sets regulation standards, and screens forex dealer members from the private sector.
The CFTC hires attorneys, auditors, economists, futures trading specialists/investigators and management professionals. Auditors ensure compliance with CFTC regulations and must have at least a bachelor's degree in accounting, though a master's and Certified Public Accountant (CPA) designation are preferred. Economists analyze the economic impacts of CFTC rules and must have at least a bachelor's degree in economics. Futures trading specialists/investigators perform oversight and investigate alleged fraud, market manipulation and trade practice violations, and are subject to work experience and educational requirements that vary by position.
CFTC jobs are located in Washington, DC, Chicago, Kansas City and New York and require U.S. citizenship and a background check. The CFTC also provides consumer education and fraud alerts to the public. Since the CFTC oversees the entire commodity futures and options markets in the United States, an understanding of all aspects of these markets, not just forex, is necessary.
The NFA is similar to the CFTC and also oversees the broader futures and commodities markets, but instead of being a government agency, it is a private-sector self-regulatory organization authorized by Congress. Its missions are to maintain market integrity, fight fraud and abuse and resolve disputes through arbitration. It also protects and educates investors and enables them to research brokers, including forex brokers, online. Most NFA jobs are located in New York, but a few are in Chicago. (Think this career is right for you? Learn more about how to get in - and how to succeed, read Becoming A Financial Analyst.)
Internationally, a regulator could work for any of the following agencies:
- Financial Services Authority (FSA) in the United Kingdom
- Financial Services Agency (FSA) in Japan
- Securities and Futures Commission (SFC) in Hong Kong
- Australian Securities and Investments Commission (ASIC) in Australia
4. Exchange Operations Associate/Trade Audit Associate/Exchange Operations Manager
Forex brokerages need individuals to service accounts, and they offer a number of positions that are basically high-level customer service positions requiring FX knowledge. These positions can lead to more advanced forex jobs.
An exchange operations associate's job responsibilities include: processing new customer accounts; verifying customers' identities as required by federal regulations; processing customers' withdrawals, transfers and deposits; and providing customer service. The job usually requires a bachelor's degree in finance, accounting or business; problem-solving and analytical skills; and understanding of financial markets and instruments, especially forex. It may also require previous brokerage experience. (For more, see Broker Or Trader: Which Career Is Right For You?)
A related position is a trade audit associate. This job involves working with customers to resolve trade-related disputes. Trade audit associates must be good with people and able to work quickly and think on their feet to solve problems. They also must thoroughly understand forex trading and the company's trading platform in order to help customers.
An exchange operations manager has more experience and greater responsibilities than an exchange operations associate. These professionals execute, fund, settle and reconcile forex transactions. The job may require familiarity with forex-related software, such as the widely used Society for Worldwide Interbank Financial Telecommunication (SWIFT) system. (The global interconnection of U.S. payment systems makes commercial and financial transfers possible, check out Inside National Payment Systems.)
5. Software Developer
Software developers may not be required to have financial, trading or forex knowledge to work for a forex brokerage, but knowledge in this area will be a major advantage. If you are a forex trader yourself, you'll have a much better idea of what customers are looking for in forex software. Software quality is a major factor differentiating one forex brokerage from another and a key to the company's success. A brokerage faces serious problems if its clients can't execute trades when they want or trades are not executed on time because the software doesn't work properly. A brokerage also needs to be able to attract customers with unique software features and practice trade platforms. (For more in this area, this is a must read, Forex Automation Software For Hands-Free Trading.)
Other positions in forex for computer types include user-experience designers, web developers, network and systems administrators and support technicians.
Additional Job Options
In addition to the specific, highly technical forex careers described above, forex companies also need to fill the same positions that all companies need to fill, such as those in human resources and accounting. If you think you're interested in a career in forex but don't yet have the required background or experience for a technical position, consider getting your feet wet in a general business position. Even an administrative support position will give you a taste of the forex work environment. For college undergraduates, many forex companies offer internships.