Foreign Exchange Traders, or Forex Trader, are professionals who work in the finance industry who invest their client’s money in foreign currencies.
Individuals who are successful in this profession have a strong eye for making smart investments on behalf of their clients.
Foreign Exchange Traders exchange and invest for a variety of individuals and organizations including corporations, merchant exchange and banking clients.
In addition to being a savvy investor, individuals who want to become a Foreign Exchange Trader will also need to rely on their customer service skills in order to succeed in this profession.
Education Requirements to Become a Foreign Exchange Trader
Individuals who want to become a Foreign Exchange Trader will need a minimum of a bachelor’s degree in order to qualify for entry level positions.
Individuals who would like advancement opportunities will benefit from attending graduate school to obtain a master’s degree in business administration (MBA).
In addition, individuals will also need to secure a license in order to become a Foreign Exchange Trader.
During their undergraduate education, individuals interested in a Forex Trader career will need to focus their educational track on economics, accounting, finance or business.
These educational tracks are often preferred by larger firms.
Individuals who would like advancement opportunities in high level positions will be more successful doing so by attending an MBA program.
MBA programs prepare individuals by exposing them to business practices gleaned from real world practices.
Individuals with an MBA are more likely to earn higher salaries, earn larger bonuses and hold high level positions.
In addition, individuals must also pass an exam to become licensed.
Individuals will need to secure a series 3 exam in order to become a Foreign Exchange Trader.
The Financial Industry Regulatory Authority is the agency that administers and monitors this exam.
Visit their website at FINRA for more information on the exams they administer for the financial industry.
Foreign Exchange Trader Job Description
Foreign Exchange Traders work on behalf of their company, merchant exchange or bank clients and invest their assets in the foreign exchange market and foreign currencies.
Forex Traders are extremely experienced in buying foreign currency on behalf of their clients and earning a profit when the foreign currency increases in appreciation in relation to the U.S.
Foreign Exchange Traders take the value of a dollar and convert it to a higher amount when they invest it in a foreign currency that will gain value when compared to the U.S.
Foreign Exchange Traders will keep an eye on the foreign markets to determine how the foreign markets are performing.
This requires attention to detail, being able to analyze foreign currency and having a keen eye to know when to trade back to the U.S.
They will need to use their customer service skills when working with clients, which also assists them when recommending a specific foreign currency to trade.
Foreign Exchange Trader Salary and Career Path
In 2012, the median salary for securities, commodities and financial services sales agents, which includes the Foreign Exchange Trader profession, was approximately $71,720 per year with an average salary of approximately $88,000 according to figures from 2013.
Exact wages will depend on the industry an individual works in.
For example, individuals working for securities and commodity contracts intermediation and brokerage firms earn a median income of $99,940 while those who work for financial investment activity firms earn a median income of approximately $108,250 per year.
The job outlook for individuals in securities, commodities and financial services is expected to increase by 11 percent through the year 2022.
This projected growth is considered average when compared to other professions and is a bit limited because of the consolidation occurring in the financial services industry.
However, this impact will have less of an effect on employment for commodity brokers and traders due to the increase of trades in the markets.
Individuals who want a career that is challenging and constantly changing will benefit from looking into entering a career as a Foreign Exchange Trader.
This career not only requires attention to detail, but requires an extensive background in foreign currencies and problem solving to determine the best course of action when investing.
Frequently Asked Questions
What does a foreign exchange trader do?
A foreign exchange trader is someone who monitors the different factors that influence local rates of exchange and economies; after that, the expert buys and sells in various foreign exchange markets and takes advantage of any misevaluations of currencies.
The typical duties of a foreign exchange trader usually include managing an account; looking at reports; reading the press from different countries; spending time on the phone, and so on.
An aspiring foreign exchange trader should have strong decision-making skills and should be comfortable with a high degree of uncertainty and risk.
Foreign exchange is international, which means that it can take place during any time of the day and foreign exchange traders can have irregular working hours.
How much do foreign exchange traders make?
On average, a foreign exchange trader can make a little more than $77.000 per year in the United States.
In case you decide to choose this career path, you can expect to earn anywhere between $34.000 and $150.000 annually.
The salary would certainly depend on a variety of factors – your education and experience level, the employer, the number of successful deals, the location, and so on.
The professionals that work in New York, California, and Massachusetts, for example, have the highest average salaries.
An entry-level foreign exchange trader can earn around $58.000 per year, while a top-level specialist with plenty of experience can make $100.000 and more per year.
How much does it cost to become a foreign exchange trader?
Foreign exchange traders are people that have absolutely different educational backgrounds; you don’t need to have a certain degree in order to become an expert, however, a background in some topics can be extremely useful.
In case you decide to take some foreign exchange trading classes, you will be able to find plenty of those online and for different budgets (some courses can be free, while others might cost you thousands of dollars).
You can open an account with only $100 and start your foreign exchange trading journey immediately.
What is the demand for foreign exchange traders?
Between 2010 and 2020, the foreign exchange trader job market is expected to grow by 15%, according to the Bureau of Labor Statistics.
That’s a bit faster than the average for all occupations in the United States.
The traders that have wide networks of contacts will have the best job perspectives.
Currency trading certainly is a growing industry due to the global nature of business.
How long does it take to become a foreign exchange trader?
In case you want to be an independent foreign exchange trader, you can, basically, start right away.
If you are planning on working in a big company, a lot of those require the candidates to have a master’s in business or finance and sometimes even a Ph.D., as well as years of successful trading experience.
It will take you 4 years to obtain a bachelor’s degree and 1-2 years to get a master’s degree. A Ph.D. will take you a minimum of 4 years to complete.