15 Steps How To Become A Trader

(doylc.com) How To Become A Trader - Traders need to be able to quickly analyze a lot of information and make informed decisions under high pressure. Trading can be very profitable, but it also comes with a high level of risk. You can work for a financial institution and trade the bank's money or the bank's customers' money. You can also work with your own clients and advise them on good investment opportunities.

• Preparing to become a trader

1. Determine what type of trader you want to become. There are a variety of different types of traders you can become. So take some time to think about which role and job description best suits your skills and interests. Most traders work for a company, buying and selling stocks, bonds, and assets for investors. Flow traders work for banks, buying and selling for the bank's customers. Proprietary traders buy and sell on behalf of the bank itself.

Sales traders act as intermediaries between a client and the market, investing their client's money. They speak directly to customers and advise them on the market and investment opportunities.

The main difference is that selling traders only invest on the instructions of their clients, so the trader does not take any risk with the investment.

Some traders specialize in a specific product or market area.

You could also become a day trader on your own if you have enough capital.

2. Recognize the skills you need. Trading is a very demanding job that requires special skills, as well as the ability to learn new things quickly and adapt to an ever-changing environment. Before you think about getting the official qualifications and certifications you need, consider the general skills that a trader must demonstrate.

Traders require exceptional analytical skills and the ability to work with large amounts of quantitative data.

Traders also need soft skills, such as the ability to communicate well with clients and provide detailed advice on market movements and opportunities.

You must be able to work well in a team, but also take on personal responsibility.

Traders must have a keen interest in how the market works and be able to learn quickly.

Traders need very strong personal discipline and motivation. You have to make split-second decisions without emotion based on your analysis.

3. Get to know the world of trading. Spend some time doing some research on trading and learning how markets work and what the daily working life of a trader entails before committing to an education and training course. A trader's day involves analyzing the market and providing detailed market reports to clients or colleagues.

They will be on the lookout for mispriced assets or other opportunities.

You will work to keep people informed of relevant events and prospects in the markets, work closely with clients and colleagues, and build strong working relationships.

You will make numerous trades and act quickly to respond to the changing financial landscape.

You can try to attract new customers and present opportunities to them.

4. Get a good degree. It is not essential to have a degree to become a trader, but the competition of working for a large financial institution is significant. Without a quality degree from a reputable university, you will have a hard time getting your foot in the door. In some cases it may be possible to start from an administrative position, make some contacts and work your way up to a trading position. In theory, you don't need a degree in a specific subject, but the following areas are most valued:

Business.

Mathematics.

finance.

Accounting.

sciences.

5. Look for internship opportunities. During your studies you can advance yourself by actively looking for internships or summer internships. An internship gives you valuable insights into the realities of everyday working life as a retailer, but you can also make contacts that can then help you to get your first graduate position.

Many financial institutions run programs, so it's often best to contact one directly to inquire about the possibilities.

You can also ask your professors who may have a contact or recommendation for you.

There are also a number of websites that list internship opportunities online that you can browse.

• Become a trader at a company

1. Become a trainee. After a good degree in a relevant subject, the first step is usually a job as a trainee at a bank or investment company. These are very competitive so you will need a very strong academic record and genuine enthusiasm and commitment to the trader's work. Employers will look for candidates who have excellent mathematical and quantitative analytical skills.

But employers will also want people who have strong interpersonal and communication skills.

You should try to demonstrate strong mental and physical stamina and a willingness to work exceptionally hard.

2. Try to network. Competition is fierce and employers often have a large number of excellent candidates for a small number of positions. In this situation, networking and personal recommendations can be very helpful and help you stand out from the crowd. Talk to your university and try to identify people working in the industry who would be happy to be contacted by other alumni.

Ask friends and family if there is anyone you know who works in trading.

Be persistent throughout. It's a tough industry to break into, so you need to prepare for a long battle and not be put off by a few setbacks.

3. Pursue additional qualifications and certifications. Even if you have enrolled in a trainee program, you still need to continue your education. You need a license before you can actually buy and sell in the markets. The requirements for this depend on where in the world you are located. In the US, you must obtain a license from the Financial Industry Regulatory Authority (FINRA). In the UK you must become an authorized person with the Financial Conduct Authority (FCA).

You will acquire the necessary qualifications as part of your graduate position.

Usually, the company pays for your exams, but you have to devote a lot of free time to studying and preparing.

This may include attending lectures, seminars and conferences.

You will also be expected to acquire the more practical day-to-day skills by accompanying a more experienced colleague.

4. Move up the ladder. In most cases, your first two years in a position will be considered an internship. At this point, you will receive certification and help around the office by familiarizing yourself with a variety of duties. You have to work very hard, be patient and always look for opportunities to develop your knowledge, skills and experience. After two years of satisfactory performance, you can advance to the next level and become a trader or analyst.

You must complete all your exams and be fully certified before you can trade.

After a few successful years, you can expect to be promoted to an Associate position.

The next step up to management level is much rarer and harder to achieve.

• Trading independently

1. Recognize the risks. You can become an independent day trader and trade with your own money or a client's money. If you're thinking about it, make sure you're not putting in money you can't afford to lose. It's estimated that around 90% of day traders lose money, so don't think about trading for a quick buck to get out of a job you hate.

This is a job that requires professional training and extensive knowledge.

You will also need sufficient hardware and software to create your own trading desk.

You should be realistic about the profits you want to make and not take them lightly.

2. Practice with paper trading. Before you put your own money or someone else's money on the market, spend some time doing theoretical paper trades. This gives you the opportunity to experiment and learn about markets before committing actual capital. There are some good electronic tools to help with paper trading where instead of actually making a trade, the beginner just postulates a trade and tracks the outcome.

Understanding the markets is essential for any trader. You must have a thorough knowledge of how the market works, including all terminology.

You need to educate yourself about the different securities, stocks, bonds, and assets that you want to trade.

3. Pass the certification exam. You cannot become a US distributor until you pass the 57 series exam. This is a replacement for the Series 56 exam taking place in January 2016. You may have completed some day trading courses or even a degree in a relevant subject, but if you fail the exam you are not a licensed trader.

You can register for the exam online.

The exam consists of 100 multiple-choice questions and takes about two and a half hours.

4. Obtain sufficient capital. When you start trading, you need significant capital to get started. No trader makes profits all the time, so there are inevitable losses to deal with. The amount of capital you need depends entirely on the type of trade you want to trade and how much trading you want to trade.

One guide estimates that someone who wants to day trade full-time needs around $100,000 to get started.

Remember that every trade involves risk and once you start trading you need to manage those risks.

5. Create a strategy. Before investing any money, it is important that you take the time to come up with at least two different trading strategies that you can then use. One should never rush into a market, but have a well-crafted plan to execute on. This should include information on how you will enter and exit the market, what type of capital you will invest, the frequency of trades and the value of the trades.

Markets can be very volatile. A clear plan is essential, but so is the ability to recognize situations and adapt quickly to circumstances.

When a strategy stops working, you must be willing to adjust or drop it. It's helpful to have multiple strategies you can use to support each other.

6. Furnish your office. To start trading, you need access to the stock market. Unless you already work as a salaried trader for a bank or other institution, you must first make an arrangement with a broker or brokerage firm. If you plan on doing fewer trades, settle on a per-trade plan with a broker, but if you're going to be doing a lot of trades, discuss a tiered plan.

You need a certain personal area to operate the market trade. If this space is in your home, you may be able to use it as a tax-deductible expense.

You need the appropriate software and a high-tech computer to monitor and track the markets and make quick trades.