Forex currency traders are people who buy, sell and trade foreign currencieson behalf of large financial institutions like investment banks, commercialbanks and central banks. You can even find currency trader jobs inmultinational corporations that conduct foreign trade. They are also employedin investment firms like hedge funds or asset management funds. Currency traderjobs are for the most highly skilled professionals in the financial industry.Fx Trading Jobs New York
Forex Currency Traders are Rock Stars
Forex traders, are the rock stars of the financial world and currency traderjobs are accordingly one of the most coveted jobs in the industry. Theprofitability of large investment banks like Morgan Stanley, J.P. Morgan andMerrill Lynch often hinge on this relatively small group of individuals. Forexample, when Goldman Sachs first became profitable far beyond analystsexpectations after the financial bailout of 2008, they attributed theirprofitability to their currency trading division.
A small group of individuals made literally billions of dollars for a singlefirm. These guys are the highest caliber employees of their firms and oftentreated as such. They are extremely intelligent, very quick thinkers, and canprocess large amounts of complex data to make positive trading decisions.
The Forex Market
The world of currency trading is by far the biggest in the world. Anestimated $3.21 trillion are traded daily on the forex market. This makes thisfinancial market not only the largest, but also the most liquid. This alsomeans firms will place their best people in currency trader jobs. In addition,those who decide to be self-employed currency traders and trade from home haveto also be of the highest caliber of traders.
Because the forex market is so large, it makes it virtually impossible forforex traders to manipulate the market like in other markets. For example, if atrader in the New York Stock Exchange wants to manipulate the price of acertain stock, which happens everyday, one strategy they might employ is to buylarge amounts of that stock over a short period of time, pumping tons of cashinto that stock and thereby creating an upward trend. This will cause otherinvestors and traders to identify this trend and want to ride it’s wave. Theforex trader will discontinue pumping money in that stock, but the stock willcontinue to rise because now other traders are investing in it. Then, when itreaches a certain point in the price, the initial trader can just sell, sendingthat stock into a downward spiral but having sold it at a high price than theybought it.
A trading strategy like this to manipulate the price would not work in theforex market. In order for the price of a currency to shift, there has to be amajor factor, and almost never can a single trader make a difference in thatmovement. That is why forex traders are the most intelligent and highly skilledpeople in them, because they cannot use guerrilla tactics like this to besuccessful. The only institutions that really do move the forex market is thecentral banks around the world. If the US Federal Reserve announce they willcut interest rates, that will certainly move the currency market. But beyondthis, individual traders cannot manipulate the forex market. That is why thoseemployed in currency trader jobs have the highest proficiency in reallyunderstanding how economic and market forces work.
Qualifications of a Forex Trader
Those employed in this field are the highest of caliber in the professionalworld. They are highly skilled, highly trained and highly motivated. They seethe challenges as well as the great rewards of becoming a successful forexcurrency trader and they rise up to that challenge and opportunity.
Many large investment banks recruit their traders from Ivy LeagueUniversities or other highly selective schools like Duke University, ChicagoUniversity or Northwestern University. They prefer those with a background inbusiness, finance, mathematics or any area that involves quantitative analysisand analytical thinking. FxTrading Jobs New York
A Day in the Life
Currency trading will look differently based on where it happens. Sometraders are speculators, i.e. they do it for profit, and others do it to hedgerisk for their company or their investments.
Those who trade for profit will most likely found in investment banks andmost hedge funds. They try to predict where foreign currency values will be andtry to make a profit. They will do the old adage of buying low and sellinghigh. The return on investment on currency trading can be so high that manyinvestment banks will actually sell securities that offer less of a return toraise money for trading in the foreign currency market. For example, aninvestment bank will sell money market securities that offer people 1-3% returnto raise capital to fund currency trading that can offer a 10-500% return.
Some traders will trade foreign currencies on behalf of their companies tohedge risk as well. Many multinational corporations who engage actively inforeign trade are highly vulnerable to currency fluctuations. In order to hedgeagainst this risk variant, many corporations will employ currency traders tooffset their risks as they engage in foreign trade. For example, if an Americancorporation has major business interests that sell their products or servicesin Australia, how much revenue and profit they make from the Australian marketwill depend largely in how the currency values against another, say the UnitedStates Dollar or USD. If the Australian Dollar or AUD, gets weaker compared tothe USD, than this corporation loses it’s revenue and profits even though theymay be selling the same amount.
That same can occur on the cost side as well. If an American company ismanufacturing it’s goods in China, the exchange rate between the Yuan and theUSD plays an important part of the business equation. If the Yuan stays cheapcompared to the USD, it will be cheaper to manufacture goods there. if thevalue goes up, it will cost more to produce and manufacturers might lookelsewhere for their manufacturing needs. Forex currency traders keep an eye onsituations like this and will trade currencies and other derivative financialsecurities to hedge against this risk.
On a daily basis, currency trader will constantly monitor all the differentvariables and inputs that go into moving the forex market. That means they willknow how to analyze different political and social events around the world,which means they stay closely abreast to world news. They also have to processa complex matrix of financial and economic data to inform their tradingdecisions. So they are always looking at numbers and data sets and coming upwith a trading strategy based on those figures.
Again, currency trading is very stressful and is associated with a lot ofpressurized situations. Currency traders who are successful know how to handlepressure, make quality decisions under pressure and rake in the big bucks.That’s why people call them rock stars. FxTrading Jobs New York
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