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Forex certification: the route to becoming a qualified broker

In order to become a certified Forex broker and/or trader, the interested individual has to jump through various hoops. One of these, of course, is studying for, and clearing, the Forex certification exam, without which you cannot become a licensed Forex trader, anywhere in the country. There is not, as yet, any single standardised test for all Forex traders. The ACI (Association Cambiste Internationale) offers Forex course that might be closest to an international certification. There are also various certification courses implemented by different countries - the FSA in the U.K. and the Series 3 license in the U.S. come closest to a proper certification course for Forex trading in those countries - which serve as qualifications for the Forex brokers of the country.

It should be noted, however, that personal trading on the foreign exchange market requires no qualifications, or certifications. It is only Forex brokers who require proper Forex certification, and even then, sometimes the track record and P/L statements are the best certifications a Forex broker can possess.

This is not to say, however, that proper qualifications go amiss. For aspiring Indian would-be brokers, the best bet is to write the examinations offered by the IBS University, or take the Forex and Treasury Management Course offered by the ICAI (Institute of Chartered Accountants of India): the degree offered would serve as Forex certification, and aid in getting a good position in a prestigious brokerage.

The FTM Course aims to impart in students:

  • An appreciation of the various changes that occur in the global financial market, a solid knowledge of the development of theory and practice that explains and manages the financial risk created by these changes.
  • An understanding of the complex nature of Forex management that will enable them to conquer the foreign exchange market.
  • The ability to identify and evaluate the risks attending trading, because of fluctuating exchange rates.
  • The ability to evaluate and apply alternative methods in managing Forex trading - after all, the Forex broker lives by his wit and must always know how to manage an unprecedented situation.
  • The ability to hedge Forex risks by using Forex derivatives, if and when so required.
  • The ability to swiftly make short-term financial decisions - knowing when to invest and when to cut out are equally important in the dealings of the Forex trader, in whose life a minute's hesitation could make a difference of millions of dollars.
  • The ability to manage interest risk by using Forex derivatives, as also the ability to use bond market instruments and money market instruments.
  • The ability to understand the linkages between the Forex market and the domestic money market, and use those connections to one's benefit - the successful Forex trader concentrates almost exclusively on the currency of a single nation, closely studying its daily fate, and this knowledge helps him reap great profits.
  • An understanding of the ethical issues surrounding money trading, both on domestic and foreign exchange markets - it's easy and tempting to cut corners, but the broker's reputation, and livelihood depends ultimately on his ethic; nobody wants to invest their money with a dishonest man.

The FTM course at ICAI, therefore, is probably the best Indian aspirants can hope for. Not only does it give the student a solid theoretical base - among the papers are the features, development and importance of the Forex market - but it also imparts practical skills which every player on the foreign exchange market requires, be he someone playing with their own funds for their own profit, or a certified broker, high-up on the employment ladder, gambling millions on the market.

Written by: Natali Ya