How to Become a Forex Broker

There’s nothing quite like the gleaming shine of a large financial institution. From Manhattan’s vast and iconic skyline to London’s remarkably more reserved financial district, the world’s largest stock and commodity trading centers seem to attract a prestige and style that’s missing elsewhere. They’re the commercial core of their respective cities, and they tend to attract the very best to their ranks.

Whether you’re trading stocks, currencies, or other commodities, it’s inevitable that, at some point, you’ll end up working with one of the financial services firms located within these districts. And if you’re a relatively high-volume trader, it’s even more likely that you’ll end up moving quite close to those that work there, learning about how they do business, and what being a broker is like.

Today, we’re going to look at the slightly less well-known form of broker – one that’s portrayed less in popular media than the up-and-coming stock broker. It’s the forex broker – a position that’s just as lucrative, potentially worthwhile, and fulfilling as any other. Thousands of financial graduates every year plan to become a forex broker in the future, yet many go about this career in the wrong way.

In fact, many finance graduates make the first wrong step in getting solely a finance degree. Forex brokers, despite pulling in tasks that directly relate to finance, can stem from many backgrounds. A great broker may have a degree in economics with a moderate focus on finance, while another may not have a finance degree at all, instead pulling on experience gained while working in the industry.

That said, gaining a finance degree is certainly an advantage, particularly when it’s from a relatively high-ranked university. The Ivy League institutions are often seen as a requirement for those aiming to become forex brokers, particularly at top investment banks and financial services firms. The total requirements for any position may vary, but generally a high-ranked degree will help your chances.

Then there’s the licensing element of becoming a forex broker – one that’s absolutely essential, both from a legal and an experience-based standpoint – for becoming a broker. For the most part, brokers are required to pass a securities licensing test, allowing them to complete currency transactions. In a range of states and markets, you’ll need to register with the Securities and Exchange Commission.

For the most part, these licensing requirements are the only true requirements for becoming a forex broker. Brokers without a formal education can still gain these licenses, allowing them to work as a broker without a financial degree or any university education. However, you may notice that there’s less room in corporate investment banking for those without a degree than for degree-holders.

Nevertheless, it’s possible for a broker to succeed in the industry without a glossy degree from an Ivy League school, provided they put in the required effort and hard work. Many brokers work as sole practitioners, offering their services as part of their own firm. This, however, requires a large amount of start-up capital, as the expenses of operating an independent firm can become quite high.

In fact, it also requires a relatively high level of experience, or at least a reputation for results. Most high-volume forex traders are unwilling to work with brokers that lack extensive experience in their field, making it difficult to gain footwork as a newbie. As such, it’s generally the case that brokers in their own businesses start out working for a major firm before starting their own broker company.

When working as part of a major brokerage, the likelihood is that you’ll be paid an annual salary, in combination with a commission for the number of accounts you close and transactions you’re a part in. Many brokers are surprised to learn that the business isn’t actually so much about mastering how you’ll negotiate a trade, but picking up new clients over the phone or using the internet.

In fact, the entire forex brokerage industry largely depends not upon your currency purchasing skills or forex know-how, but your ability to close clients and sales using persuasion. Independent brokers operate in the same way, but with an even greater reliance on ensuring clients are catered to, as their entire income is built around successful trades, and the commissions that result from them.

It’s important to remember that, like any other industry where major earnings are possible in a short space of time, those with the best strategy and hardest drive typically end up winning. Many people dream of being a broker without realizing that they’ll fall under the radar without substantial trades and commissions on their side. Despite a lack of required qualifications, this isn’t an easy job at all.

As the global investment market undergoes a rather rough transition into a new era, however, it’s likely that many new positions will appear for those with an innovative view and a lot of drive to succeed. Competition is fierce, especially for positions with established investment banks, and it’s going to take a lot of skills – both forex-related and otherwise – to land a solid position as a broker.

Despite its difficulties and relatively tough barrier to entry, however, working as a forex broker can be a rewarding job, both financially and intellectually. For those with a bright mathematical brain, a strong command of negotiation, and the drive to pick up the required qualifications, you could have a remarkably bright future ahead of you as a forex broker.

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