Trader Career Information

Traders work in the financial markets. There are several categories, such as: day traders, futures traders, stock brokers or managed funds traders. The work can be exciting, rewarding and stressful. Financial markets traders work in 24/7 markets that is constantly fluctuating. Traders can achieve career advancement faster than any other profession. Many successful traders start as employees and are running their own businesses by the time they're in their 30s. Successful traders can earn a high salary, bonuses and commission. This is, arguably, the most performance driven industry in the world.

The Work Environment

Although markets close occasionally traders work continuously in most cases because of the global market. The trader's job is very much performance based. Trading covers a range of securities:

  • Stocks
  • Futures
  • Options
  • Rights
  • Funds units
  • Bonds
  • Other securities (debt securities, mortgage securities, etc.)

Each of these trades is based on client orders. The orders can be given verbally or in writing. Some orders for funds traders will come from the employer. Order turnaround is supposed to be instantaneous, because most orders are conducted in real time during trading. In order to properly conduct these trades, the trader needs to know:

  • Sales procedures for each type of security: The basic buying and selling is straightforward in most cases, but old style manual trades are quite different from modern registry trading. Some funds have additional processes regarding their units.
  • Legal requirements for trades: Some securities have specific requirements by law and trader policies.
  • Audit and accounts requirements where applicable: These are usually automatic, but in some cases may be related to consecutive trades and account balances have to be considered.

Knowledge Base

Traders often specialize in particular markets. They know their markets intimately, and are experts at making profits out of trades. A day trader, for example will know the market's moves and read the trends, picking the right time to buy and sell. This is pure experience, and these traders are expected to perform at a very high level of profitability.

The more common market trader buys and sells on order margins, in which a set sale price dictates the results of the trades. So if a stock is valued at $1, the sell price is set at $1.25 or 75c, creating a bandwidth of prices for trading. Most of these sales are automatic. Traders use this method to both minimize risk and lock in profits at known margins. The market trader's buying and selling patterns are very well organized, and not much is left to chance. Investment specialists usually work for funds, and although their work can overlap with normal traders, the motif in investment-based trading is longer term. Investment trading is generally based on very large capital investments. Where a million is invested, the result is expected to be a much higher return than day trading, because the investment is in play over a longer period of time.