Forex trading is a lucrative business that involves buying and selling currencies with the aim of making a profit. While some traders use their own money to initiate trades, others prefer to trade with someone else’s money. This is known as prop trading or proprietary trading. Prop traders are individuals who trade with the firm’s money and share the profits with the firm. In this article, we will explore the certification required to trade someone else’s money on the forex market.
Proprietary trading firms are companies that provide traders with the capital to trade. These firms hire traders to trade their money, and in return, the trader receives a percentage of the profits. To become a prop trader, you need to have a good understanding of the forex market, trading strategies, and risk management. You also need to have the necessary certifications to be eligible to trade with someone else’s money.
The first certification you need to trade someone else’s money on the forex market is the Series 3 license. The Series 3 license is a certification that is required by the National Futures Association (NFA) for individuals who want to trade futures contracts. Forex is considered a type of futures contract, and as such, anyone who wants to trade forex with someone else’s money needs to have a Series 3 license.
To obtain the Series 3 license, you need to pass the National Commodity Futures Examination (NCFE). This exam tests your knowledge of the futures market, trading strategies, and risk management. The exam consists of 120 multiple-choice questions and takes two hours to complete. The passing score is 70%.
The second certification you need to trade someone else’s money on the forex market is the Series 34 license. The Series 34 license is a certification that is required by the NFA for individuals who want to manage forex accounts. This license is mandatory for anyone who wants to trade forex with someone else’s money.
To obtain the Series 34 license, you need to pass the Retail Off-Exchange Forex Examination. This exam tests your knowledge of the forex market, trading strategies, and risk management. The exam consists of 40 multiple-choice questions and takes one hour to complete. The passing score is 70%.
Once you have obtained the necessary certifications, you can start looking for a prop trading firm to work with. Prop trading firms offer traders the opportunity to trade with their money and share the profits. These firms provide traders with the necessary tools and resources to succeed in the forex market.
In conclusion, to trade someone else’s money on the forex market, you need to have the necessary certifications. The Series 3 license and the Series 34 license are the two certifications required by the NFA for anyone who wants to trade forex with someone else’s money. These certifications test your knowledge of the forex market, trading strategies, and risk management. Obtaining these certifications is the first step towards becoming a successful prop trader.
