How to Pass the Series 34 Exam
Under the expected new forex registration requirements, forex managers will need to take and pass a new proficiency exam called the Series 34 Exam - the Retail Off-Exchange Forex Examination. The National Futures Association ("NFA") posted exam topics and from these topics we have created a free series 34 exam study guide. This study guide can be a central part of a study regime that I have used to pass the exam.
Background on Forex Registration
Like many parts of the investment management industry, the forex industry (that is, the off-exchange foreign currency trading markets) has come under more scrutiny within the last couple of years. The overseeing regulatory bodies (the CFTC and the NFA) managed to get congress to pass a requirement last year requiring forex managers to register with the CFTC. These new registration requirements have not yet been advanced by the CFTC, but the NFA has moved forward with a number of discussions as to what it will mean for managers once they become members of the NFA (one of the requirements of the registration process). These new requirements will (presumably) apply to all kinds of forex managers - from forex hedge fund managers to forex separately managed account
Background of the Exam
The exam consists of 5 parts which include: Definitions and Terminology, Forex Trading Calculations, Risks Associated with Forex Trading, Forex Market - Concepts, Theories, Economic Factors and Indicators, Participants, Forex Regulatory Requirements. There are 40 questions and to pass you will need to score a 70% (28 questions correct out of 40).
How to Pass
In order to pass I did the following: (1) created the free study guide based on publicly available sources on the internet, (2) created notecards of the major topical items, (3) created sample exam questions and then reviewed those exam questions, (4) read all appropriate NFA rules and releases in addition to general information on forex trading and the forex markets. This is how I passed the exam, but your situation may be different so I always recommend to study in a manner in which you think is likely to lead you to a passing score.
Recommendations on how to score well
I would recommend a few things for scoring well on the exam. The most important thing that you can do is to read exam prep materials and take practice series 34 exam questions. Taking practice exam questions helps you to get a feel for how the test will be structured and also helps you to think about how to apply the concepts you have worked hard to memorize and understand. I specifically recommend practicing exam questions which simulate the calculations you will need to make during the test (yes, you will need to use a calculator). Also, you should understand how to pace yourself through the exam. FINRA (the regulatory body which administers the exam) is notorious for placing the easier questions in the beginning and end of the exam - the middle is filled with plenty of tough questions.
Please let me know if you have questions about forex hedge funds.