become a trader

A trader can be defined as a professional who buys and sells financial assets such as:

  • stocks
  • bonds
  • securities

They complete this task on behalf of a client, which could be an individual or an organization. Traders generally work within short-term trends. This differentiates them from investors, who hold onto financial assets long-term. Traders can work in large and small corporations, businesses, or for themselves. This allows for a great deal of flexibility in employment opportunities. They are responsible for the management of financial portfolios. The job is stressful, with a lot of long hours at the office and continuing education requirements.

Most traders enter the job market after earning a bachelor’s degree. However, a master’s degree can lead to great employment opportunities. These professionals have high salaries and are critical in financial management in the private sector. They are considered a necessity by the majority of the institutions in the financial field.

Salary

The average salary for a trader is $67,300, according to the Bureau of Labor Statistics. However trading has a variety of specialties associated with it. Individuals can potentially earn up to $150,000 when their annual salary, profit sharing, and commissions are added together.

Beginning Salary

According to Payscale, the average beginning salary for a trader is around $77,800. This number can change based on the professional’s specialty of trading as well as where they are located. Bonuses and profit sharing also play a role in salary numbers.

Key Responsibilities

Traders have a variety of responsibilities, with some having more importance than others. The main responsibility of any trader is to execute trades in primary and secondary markets, a task they do daily and attend to throughout the day. Another key responsibility includes analyzing and maintaining:

  • financial records
  • investment portfolios
  • valuation reports on stocks and securities

They are also responsible for writing and delivering reports to key supervisors and the board of directors of their company,  to keep everyone up to date with trade reports. They are also the liaisons who work with client management groups, clients, and teams when working on trade strategies.

Necessary Skills

Trading requires more than just an education and work experience. There are skills that each professional must have to be successful. These include:

  • analytical skills
  • critical-thinking skills
  • decision-making skills

They also must have the ability to communicate effectively with:

  • team members
  • clients
  • supervisors

Some traders work alone, meaning they must be efficient and self-disciplined in their work. Traders must also have experience with cashflow models, prepayment models, and technical skills that will help them in the business world.

Degree and Education Requirements

All trading professionals must earn, at a minimum, a bachelor’s degree from an accredited university. The degree can be in a business or finance-related field, although  most employers prefer finance degrees. Minors in economics and accounting are considered an advantage on any resume. Employers require a bachelor’s degree because it assures them that the candidate has taken on an internship, which is required for most undergraduate degree programs. However, while a bachelor’s degree is a great step forward, candidates who have earned a Master’s in Business Administration are always considered first. So it is a good idea to consider earning a graduate degree. There is a substantial difference in salary between the degrees, with traders that have a master’s degree earning, on average, around $20,000 a year more than their undergraduate counterparts. Continuing education is also necessary to keep pace with the changing face of the financial market. Many companies require a professional continue to attend conferences and earn qualifications as terms of their employment.

Rewards and Challenges

There are a variety of rewards and challenges that accompany this profession. The rewards include a great salary, providing a professional does the work to secure the best outcomes for their client. It is also a great career for the analytically minded who can focus on one goal and see it through to completion.

There are also many challenges that come with trading. Professionals often work long hours, including overtime. They do not get a lot of time off from work, meaning little time for personal activities. The job also requires a great deal of self-disciplined education and commitment to staying updated on the financial markets. This can eat up a lot of free time. The job is best suited for professionals who understand the commitment they must make to their career and can do with little free time at the beginning of their career.

Getting Started

One of the first steps that any individual interested in taking on this career is to obtain certification right after graduation. The most popular certification is the Chartered Market Technician certification. It’s administered by the CMT Association, a global organization that caters specifically to traders. While many companies and clients may not require this certification, it is a necessary step to advance into a senior-level position further down the line. Additionally, all traders must work between one to three years at an entry-level position, preferably in the specialty they have chosen. Since specialties have a large impact on what kind of job a professional will get, it may also be necessary to work in that specialized field for at least one year. Investment experience, in which the candidate has worked closely with clients and can demonstrate results, is necessary for trading firms and investment agencies.

Future Outlook

The current job outlook for traders, as reported by the Bureau of Labor Statistics, stands at six percent through 2026. This is an average rate of growth that is depicted in all occupations, but job demand depends on the region. In major cities that focus on banking and financial services, the job outlook is much better than average but is mitigated by slowing numbers in the South and Southeastern regions of the country. Traders can find jobs:

  • at major banking institutions or trading firms, most of which are located in Chicago and New York
  • at companies looking for investors
  • for investors who are looking for new opportunities in terms of companies that are about to go public

Additionally, traders can work for themselves as consultants. Traders often build their own businesses and take on private clients, which can be individuals or businesses.

Trading is a notoriously challenging career. It’s not for everyone. However, for those who have read this entire article and are still committed to this career, it can also be very rewarding.

Now that this overview has been read, you can learn more about the specializations in trading and choose the path that makes the most sense for you.

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