Contributor, Benzinga
July 18, 2023

Since the popularization of foreign currency exchange or forex trading via retail online forex brokers, the forex club model has attracted many online retail and novice traders. Not to be confused with the Cyprus-based Forex Club forex broker, forex clubs consist of market professionals that have involvement with different aspects of the forex market.

These clubs must adhere to the principles embodied in the FX Global Code, an international code that replaced the forex codes of conduct in 2017. Keep reading to find out more about how a forex club might benefit your trading.

Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

What is a Forex Club?

While a less-formal forex club could cater to or include retail and novice traders, most of the better-known formal forex clubs are national or regional associations of wholesale forex market professionals, including brokers, dealers and treasury managers who are adept in different aspects of the foreign exchange market. These market professionals are generally expected to adhere to the FX Global Code and to provide networking and educational support for other members of their forex club.

Many formal forex clubs comprise part of an organization called ACI Financial Markets Association (ACI). This organization for wholesale financial market professionals was founded in 1955 and is headquartered in Paris, France. Both informal and formal forex clubs have increased significantly in number and membership worldwide in recent years, which reflects the massive size of the Interbank forex market and the growth of interest among retail traders in online forex trading.

How Does the Forex Club Work?

A forex or forex exchange club can support its members in various ways. For example, a forex club might provide access to forex-related educational resources, as well as access to a community of other forex traders operating at different levels of expertise.

One of the biggest challenges to overcome on your way to trading profitably in the foreign exchange market is getting the education you need to succeed. Many people attempt to learn forex trading on their own and subsequently fail for a variety of reasons.

By learning how to trade forex from peers and experts in a supportive club environment, you get the benefit of learning from other people's trading mistakes, which lets you avoid making those errors yourself. Having access to other forex traders also lets you learn about different strategies for making money in the currency market and what might work best for your particular trading style and preferences.

Forex clubs can also provide members with expert advice on a variety of forex topics including signal generation, technical analysis and fundamental analysis. You might also get tips on how to obtain and apply many of the tools and techniques professionals routinely use to successfully trade in the forex market. Many forex club members appreciate the support they receive from fellow traders that can help motivate them and improve their trading results.

Trading Industry Standards in a Forex Club

Formal forex clubs generally adhere to trading industry standards as provided by the FX Global Code. This code contains a set of principles for good practices for operating in the global foreign exchange market. The FX Global Code was originally conceived of and developed by the governors of the Bank of International Settlements (BIS).

The BIS governors commissioned their Markets Committee to develop a common set of guiding principles to help restore trust in the forex market and promote its smooth and effective functioning. The Markets Committee developed a plan for public and private sector cooperation to promote and incentivize adherence to the Code after reviewing existing codes of conduct.

The Global Foreign Exchange Committee was subsequently established in May 2017. The FX Global Code was then developed by a team consisting of representatives from official institutions that included 16 central banks and other financial institutions, more than 15 asset management companies, approximately 30 domestic and overseas banks and over 20 trade associations and infrastructure providers. In addition, more than 10,000 comments were taken into account from a variety of market participants and associations.

The Code embodies 55 principles universally accepted as best practices in the forex market, and it is written in clear and simple language that includes illustrations and a glossary. The six leading principles of the FX Global Code include:

  • Ethics
  • Governance
  • Information sharing
  • Execution
  • Risk management and compliance
  • Confirmation and settlement

Adherence to the Code provides a number of important benefits for both institutions and the FX market as a whole. As an adherent to the Code, you let your clients know that you have an intricate understanding of the FX market.

Following the Code demonstrates you support a fair, effective and resilient FX market and that you are an informed and responsible market participant. The Code gives market participants a competitive edge when demonstrating their conduct credentials and fosters a level playing field between the buy-side and sell-side, improving the quality of executions and pricing.

If you’re looking for a reputable forex broker, you might want to find out if their employees belong to a forex club and if they adhere to the FX Global Code. Forex market makers who adhere to the Code may be more likely to have higher standards and fairer dealing spreads than those who do not adhere to the Code.

Top Brokers for Forex Trading

If you’re looking to join a forex club, then you may also want to get a margin trading account set up with an online forex broker so you can trade forex for your own account. Benzinga has made deciding on a reputable forex broker easier by putting together the following comparison table.

  • securely through Plus500's website
    securely through Plus500's website
    Best For:
    Mobile Users
    Rating:
    Read Review
  • securely through Forex.com's website
    securely through Forex.com's website
    Best For:
    Forex Trading in and Outside the U.S.
    Rating:
    Read Review

    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

  • securely through AvaTrade's website
    securely through AvaTrade's website
    Best For:
    Non US Forex Trading
    Rating:
    Read Review
  • securely through FxGlory's website
    securely through FxGlory's website
    Best For:
    Fixed Spreads
    Rating:
    Read Review
  • securely through IG Markets's website
    securely through IG Markets's website
    Best For:
    Forex Execution
    Rating:
    Read Review

    Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

  • securely through eToro Forex's website
    securely through eToro Forex's website
    Best For:
    Demo Accounts
    Rating:
    Read Review

    CFD trading is not available to U.S. users. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

  • securely through HYCM Capital Markets's website
    securely through HYCM Capital Markets's website
    Best For:
    Forex Trading
    Rating:
    Read Review

A Valuable Resource

Forex clubs offer valuable resources, education and networking opportunities for forex market professionals. They operate under the principles of the FX Global Code, promoting ethical conduct and industry standards. Joining a club provides access to educational materials, experienced peers and expert advice. The club environment improves trading skills, and adherence to the FX Global Code demonstrates a commitment to fair market practices. Considering a broker's affiliation with a forex club and adherence to the code can indicate higher standards and fairer trading conditions.

Frequently Asked Questions

Q

How does forex actually work?

A

Foreign exchange or forex involves exchanging one currency for another at an agreed-upon exchange rate. Forex trading is a speculative activity where operators make strategic bets on the future direction of exchange rates.

Q

Can you get scammed in forex?

A

Yes, forex scams do exist. Make sure to deposit your trading capital with a reputable and regulated online forex broker.

Q

Is forex trading legitimate and legal?

A

Forex trading is a legitimate and legal way to trade currencies and profit from exchange rate fluctuations. However, it is important to comply with regulations and obtain necessary licenses and permits in different countries.

Get a Forex Pro on Your Side

FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets with low pricing and fast, quality execution on every trade. 

You can also tap into:

  • EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
  • Powerful, purpose-built currency trading platforms
  • Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program

Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.

About Jay and Julie Hawk

During her financial career, Julie developed world-class expertise in technical analysis, including Elliott Wave Theory, and was deeply involved in initiating research into automated trading and trading signal systems. As a member of the San Francisco Writers’ Guild, Julie regularly wrote trade strategies, educational material, market commentary, foreign exchange newsletters, reports, articles and press releases. In addition, Julie was interviewed for various financial markets magazines and news wires in her professional capacity as a forex and derivatives expert. Since retiring from working at banks, Julie has been writing and editing books and articles about financial markets for companies like Benzinga, as well as trading forex online and mentoring other traders as part of TheFXperts’ financial team.

In addition to trading stock index, forex and commodity futures and options professionally on exchange floors, Jay also has experience trading stocks and options for private investors and trading forex online for his own account. He has also developed extensive experience in performing and using fundamental economic and corporate analysis to inform his trading and investment activities. Jay is also an expert financial writer with particular expertise in reviewing online brokers and investor services.