How to Become a Trader

To become a trader, you also need to become an expert in the markets. Traders operate in a highly performance oriented workplace, and are often required to meet performance standards across a range of indicators.

Education and training

Most traders are required to have a Bachelor's Degree as a minimum qualification at entry level. Although there are no specific requirements for majors many are naturally engaged in studies of finance, economics and other market related fields. Above entry level, a Masters Degree is the norm for promotional jobs, and MBAs are common in the middle to upper levels.

Employers provide extensive training, both in classroom and practical work, for entry level positions. This training is usually geared to the employer's business model, detailing the company's practices and products. In some cases this training extends to advanced training in stock analysis, sales, and rotating staff through departments to get a thorough grounding in business operations.

Licensing

To qualify as registered representatives, brokers must:

  • Be an employee of a registered firm for 4 months
  • Achieve a passing score of 70% in General Securities Registered Representative Examination (aka Series 7 Exam administered by FINRA (Financial Industry Regulatory Authority)
  • Most US states also require that representatives pass the Uniform Securities Agents State Law Examination, which is a test of knowledge of securities, consumer protection laws, and statutory record keeping requirements.

Skills

Becoming a trader also involves developing personal skills. This is a competitive, client-driven market in which career advancement is very much performance based. Traders work with a very diverse internal and external clientele.

The skill set required to succeed in this environment is extensive:

  • Excellent interpersonal skills: Client relationships and team relationships are particularly emphasized in the market environment.
  • Good communications skills: This is a natural requirement of the work, including working with orders, consulting with clients, and basic operational work.
  • Problem solving skills: Essential for working with trading issues and client needs.
  • Sales skills: This requirement becomes progressively more important in a trader's career as sales volumes and values reflect the nature of the trader's role.

Types of trader jobs

Although the common image of a trader as a stock trader is the basic mainstream trader job, there are many specialist jobs across the financial markets:

Futures traders: Traders in the futures market specialize in futures contracts to buy stocks and commodities.

Options traders: Specialist traders who work with options, which are a big sub-market of the stock market.

Fund traders: Employees of funds, working on investment purchasing and sales on behalf of funds.

Day traders: Traders who work either for themselves or financial institutions, buying and selling on the same day to make a profit usually with performance requirements.

Institutional traders: Specialists who are experts in institutional investment, including purchasing interests like stock or units in funds. These traders usually work for major financial institutions, often working with very large amounts of money.

Niche traders: Expert traders specializing in particular areas of the market, like blue chips, oil, technology or sectors or indices.

Portfolio managers: These traders operate of a suite of investments for clients, these are usually expert general stock market traders