Adam Smith, a renowned economist, argued that trade allows individuals and countries to be prosperous and wealthy. Traders ensure that everyone benefits from trading activities and facilitate growth and prosperity by making prices, executing trades for various commodities and mitigating market risks for ... Continue Reading
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Explore Career Adam Smith, a renowned economist, argued that trade allows individuals and countries to be prosperous and wealthy. Traders ensure that everyone benefits from trading activities and facilitate growth and prosperity by making prices, executing trades for various commodities and mitigating market risks for individual clients or companies.
What are the typical responsibilities of a Trader?
A Stock Trader would typically need to:
The work of a Trader is typically office-based, needing occasional overseas travel to meet international clients. As many trading banks are international, there are several opportunities to work abroad. Traders in sales often travel once a month. Freelance work or self-employment is possible only with more experience.
Traders typically work 40 hours a week but may need to work longer in entry-level roles. Working hours may also vary depending upon the asset being traded, which could range from foreign exchange to oil.
Work during weekends or evenings is common since their clients work during the day. Part-time work is not very common, but job sharing and career breaks are possible.
Finding a new job might seem challenging. Traders can boost their job search by asking their network for referrals, contacting companies directly, using job search platforms, going to job fairs, inquiring at staffing agencies and converting internships into full-time jobs.
Traders are generally employed by:
Professional associations and organisations, such as the International Federation of Customs Brokers Associations (IFCBA), are crucial for Traders interested in pursuing professional development or connecting with like-minded professionals in their industry or occupation. Membership in one or more adds value to your resume while bolstering your credentials and qualifications.
Prior work experience in trading or any allied financial area, such as sales, is crucial to gain an accurate understanding of how financial markets function and helps you keep up with emerging trends and jargon in such markets. It is essential to undertake an internship in your first or second year of university as it may enable you to land an interview more quickly in the future.
Many investment banks, firms or stockbrokers hire interns during their last year of undergraduate studies. Opportunities for shadowing major traders are also available. Dates for such programs vary across the world.
Keep your eye out for relevant opportunities since spots fill out fast once applications open. Successful interns may even receive full-time job offers upon graduation.
Read about the profession and interview experts working in trading to prove your commitment to course providers and prospective employers.
Employers, particularly large firms, prefer to hire candidates with a bachelor’s degree or higher for entry-level trading jobs.
Consider a degree in a numerate subject such as mathematics, statistics, economics, accountancy, finance, or other actuarial sciences to gain the relevant knowledge and skills for professional success.
You may also hold a degree in politics, management or business studies.
Traders often acquire a Master of Business Administration (MBA) degree since it is a requirement to advance to senior trading positions. This degree gives you real-world experience, enhances your potential salary and adds immense value to your career profile.
If you are in high school, take classes in mathematics, economics and business to enter prestigious universities and schools for your undergraduate studies.
Typically, Traders require licenses, although specific licensing requirements may vary according to the firm you work for and your specialisation.
Many employers provide training to help you pass licensing exams. Government entities conduct licensing, which requires the fulfilment of criteria such as education, work experience and training.
Although optional, acquiring certifications, such as the Chartered Financial Analyst (CFA), is highly recommended as it enhances your professional standing as a Trader. To qualify for CFA credentials, you need a bachelor’s degree or four years of related work experience. You must also pass three exams that need several hundred hours of independent study.
The CFA exams cover accounting, economics, securities analysis, financial markets & instruments, corporate finance, asset valuation, and portfolio management. You would typically take them while obtaining the necessary work experience.
Applicants also must have an international passport.
Performance, experience, and the acquisition of professional qualifications drive career progression. Employees with consistently high levels of performance may be eligible for promotion every two to three years.
Entry-level Traders are regarded as trainees for their first two years, after which they may progress, or their employment may be terminated depending on their professional output.
Traders may advance their careers once they show that they are capable of handling a range of accounts. You are likely to manage individual accounts at the entry-level position and institutional ones as you progress.
Often, traders reach associate level two or three years after graduating. However, beyond this level, fewer candidates can reach the level of executive director level.
With more experience, you may also supervise the activities of one or several teams of junior Traders while managing institutional accounts and portfolios. More experience and professional networking may yield positions such as Associate, Senior Associate and Vice President or Executive Director and eventually Managing Director (MD).
Usually, after about five years and with the right experience, you may even become Partners in firms or join other management positions. As Branch Office Managers, you would oversee other Traders while serving your own clients.
Passing a series of tests may qualify you to become Portfolio Managers who exercise greater authority over investment decisions relevant to the account under them.
Consider getting an MBA degree to fast-track your career advancement.
Frequent moves between banks are possible at all levels but are more likely to occur from associate level and above. Some candidates may move to a new desk to trade a new product or shift to a new country.
Career transitions to other actuarial or financial careers may be possible, for the field of finance is highly interdisciplinary.
Candidates with an MBA degree and a Chartered Financial Analyst (CFA) certification have the best job prospects.
Continuing professional development (CPD) will help an active Trader build personal skills and proficiency through work-based learning, a professional activity, formal education, or self-directed learning. It allows you to upskill continually, regardless of your age, job, or level of knowledge.
Since financial markets are constantly and rapidly evolving with the growth of financial technology, you must keep up with new products and services using continuing education courses and seminars.
Entry-level Traders in large firms receive technical instruction on securities analysis and sales strategies along with on-the-job training on a rotational desk basis to broaden their understanding of the securities business. They shadow senior Traders to understand job responsibilities, often assisting with data analysis and administrative tasks.
Additional lectures, seminars and conferences may supplement the training. Moreover, if a Trader specialises in a product for a specific country, they often receive language training.
You may also opt to earn the credentials of a Chartered Financial Analyst (CFA). Employers may pay for you to take examinations, but you would need to organise time to study alongside work commitments.
You would need to renew any licenses and certifications periodically by completing a certain number of continuing education hours, which may include computer-based training on legal requirements or new financial products or services.
Potential Pros & Cons of Freelancing vs Full-Time Employment
Freelancing Traders have more flexible work schedules and locations. They have full ownership of the business and can select their projects and clients. However, they experience inconsistent work and cash flow, which means more responsibility, effort and risk.
A full-time Trader, on the other hand, has company-sponsored health benefits, insurance, and retirement plans. They have job security with a fixed, reliable source of income and guidance from their bosses. Yet, they may experience boredom due to a lack of flexibility, ownership, and variety.
When deciding between freelancing or being a full-time employee, consider the pros and cons to see what works best for you.
History of Trading?
Trade has been a part of human civilisation for a long time, in varied forms across societies. These various systems could never be unified into one single system due to the isolated nature of communities. In the past, however, the barter system was a prevalent form of trading in which services and goods were traded in exchange for other services and goods.
However, the barter system was inconvenient due to the lack of double coincidence of wants and the absence of any basic standard of measure of the value of products. As a result, money became the standard against which to measure the values of all products.
This invention triggered a chain of economic and financial developments, including introducing credit facilities such as commercial banks, share trading, etc.
Stock trading came into existence with the formation of joint-stock companies in Europe and played an instrumental role in European imperialism. The Dutch East India Company was one such company, which publicly traded its shares via the Amsterdam Stock Exchange.
The success of joint-stock companies in fostering economic development and geographical expansion made them a mainstay of the financial world.
Types of Financial Traders
There are various types of traders. First come Flow Traders, who buy and sell products such as securities or commodities based on the movements of financial markets for banks’ clients.
Next are Sales Traders, who execute clients’ instructions by placing orders on financial products and advising them on market developments and risky ventures.
They are mere intermediaries, unlike Flow Traders, who possess more control and independence in the trading process.
Traders may also vary in roles based on the products they specialise in, such as shares, fixed-interest bonds or foreign exchange markets.
Trading is highly competitive because of its attractive options for shouldering responsibility and excellent career advancement opportunities. To truly excel as a Trader, the services you offer with sincerity and integrity must surpass any chance of finite monetary estimation.
Focus on building self-awareness in your early stages as a Stock Trader, which allows you to focus on the correct statistics to aid your trade decisions, foresee potential shortfalls, mitigate psychological biases and progress more effectively.
The New York Stock Exchange (NYSE) is so traditional that Traders not wearing a suit and a tie cannot enter the floor of the exchange.
What do Traders do?
A Stock Trader would typically need to:
Accredited
