Did you know about white label brokerages or prop firms? These are some of the forex trading related careers you should know about that exist for traders.
Who would have thought one could start a brokerage at a fraction of the cost? Or what about trading thousands of dollars for a prop firm? These are some opportunities that exist in the industry.
Online forex trading has grown immensely in popularity due to the low entry barrier affordable to an average person. As more brokers exist, people have become attuned to forex and how financial markets work generally.
Despite the relative ease for anyone to use forex as a supplementary income source, there are other little-known careers related to this instrument that can be as equally lucrative. This article will cover six of these in brief detail, all of which usually do not require formal qualifications. Additionally, the ones that do will also get a mention.
Writing
Writing is as prominent in forex as any other industry, with several different exciting paths. In this digital age, specifically with social media, content marketing proves itself as a commodity in graphical, video, and writing form.
Some of the streams requiring writing in content marketing include blogging, copywriting, content creation, and editing for others on a freelance or permanent basis.
On a more traditional route, these could be other forex-related writing careers:
- Journalist/reporter covering the latest stories about what’s driving the forex markets and other industry events as a whole.
- Author people can write e-books or traditional books for educational purposes.
Prop trading
Short for proprietary trading, this refers to the trading of a large fund provided by a private financial firm. Historically, prop trading existed with commercial banks, though many prop firms related to forex nowadays receive their funds from a vast pool of private investors.
Forex prop trading firms have given traders a taste of managing funds for a company without a need for qualification in finance, economics, or mathematics. With this exception, most firms require ongoing or one-time fees for the privilege of accessing their money.
Additionally, and rightfully so, prop firms have stringent, risk-centric performance indicators that compliment responsible trading and steady growth. Some of the well-known and recommended prop firms in forex include The 5ers, FTMO, Traders4Traders, Maverick Trading, and AxiSelect.
Introducing brokers/affiliates
Most brokers will offer opportunities to become affiliates or IBs (introducing brokers). Both of these careers are very similar as they involve someone introducing clients to a broker in exchange for commissions off their live trading activity.
The actual role of an introducing broker has changed drastically from what it was before, with much less formality and more people acting as one-person operations. An IB is someone (usually another trader or someone with extensive knowledge on a particular financial market) who ‘introduces’ a prospective client to a broker.
Although an affiliate essentially performs the same role, IBs have a direct relationship with clients by providing additional support and training where necessary. Meanwhile, an affiliate simply recommends a broker and doesn’t need to do much else.
Introducing brokers and affiliates tend to receive ongoing commissions based on the number of lots traded by their referred clients. Another method uses a CPA (cost per action) model where IBs and affiliates receive a one-time reward per referred client, provided they’ve traded a specific number of lots over a defined period.
PAMM account managers
Successful traders who can prove profitability over the long term can become a PAMM manager for a broker. A PAMM (Percentage Allocation Management Module) account pools money from several investors where trades from the ‘money manager’ are automatically copied onto their capital.
As a PAMM account manager, you can earn a percentage of any profits generated for your investors. Brokers provide the PAMM software application to the manager to attract an unlimited number of investors.
Thus, there is an opportunity for the money manager to not only earn from their personal trading but also earn commissions from the profits made for their investors. Typically, investors will agree to a specified investment period and minimum capital requirement.
A similar career to PAMM is becoming a registered trader on a broker’s copy trading system. Copy trading works in a similar way because the trades automatically copy onto investors’ capital and the ‘master’ account holders receive a cut of the profits.
Forex signal provider
Another career involving multiple investors in forex is becoming a signal provider. This opportunity is especially efficient for day traders who can provide regular signals to clients who have signed up. Providing signals can be done privately through messaging networks like Telegram or formally through platforms such as MetaTrader5.
White label brokerages
Owning a white label brokerage is a significantly cheaper route than starting one from scratch, which is the biggest advantage. A white label is a practice of using the resources and technology of another broker, though marketed as though it were your own.
Essentially, anyone who can afford this opportunity promotes their brokerage using their own name, marketing, and branding while utilizing the resources of another. The broker would provide all the necessary technology and retail trading operations such as platforms, licensing, and back-office support.
The provider handles all of these aspects for a one-time setup fee and then monthly maintenance fees. These costs are significantly less than creating a brokerage from the ground up. Surprisingly, many brokers operate using this model by leveraging established financial technology providers. This business model may partly explain why more brokers are cropping up.
Other careers that may need tertiary qualifications
Anyone can usually achieve these six above-listed careers without specific education. However, a few other ones also exist, although they most likely will require a tertiary qualification (typically in computer science, economics, finance, or mathematics) and perhaps years of prior experience.
- Software developer creates various trading software and platforms for brokerages and other financial institutions.
- Forex analyst/researcher performs research and writes daily or weekly market commentary about technical and fundamental analysis.
Conclusion
Although most of the careers listed here are simple to access, it does not take away the hard work and dedication that’s required. We can see that despite the advantages of trading your own account, one of the pitfalls is nobody can guarantee a fixed monthly income.
However, it can and should act as a supplementary income source that allows traders to explore the other avenues listed here.