Become a Stock Trader & Master the Financial Markets

Trader, broker, market operator… All these terms make quite a few people dream. Who has never thought about being in the skin of Bud Fox or Gordon Gekko “playing” with millions of dollars? The trader is a key figure in financial institutions. Praised in periods of strong growth, he is also the one people will put the blame on in times of financial crisis. His role is relatively simple. He must act directly on the financial markets on behalf of the company where he works (banks, investment companies) or on behalf of clients who may be individuals, companies or institutional investors.

The trader’s role

The trader has the function to operate on financial markets. However, customers do not contact him directly. The customer gives his order to the salesman who tries to steer the client towards a particular investment. Once the order determined by the customer, the salesman will transfer it to the trader who in turn will execute it in the best possible way depending on market conditions.

The trader’s role is not just about waiting for the the salesmen’s phone calls. He can – and must – act early and provide customers with what they’re looking for. Thus, he has the right to purchase securities with the expectation that the salesmen will be able to sell them to customers. To avoid excessive risk-taking, traders are closely monitored by the back office. The overall position of their accounts as well as the order sizes they put on the market are constantly scrutinized, and computer systems can automatically block certain orders if they go over the limit. All their telephone conversations are also recorded.

The trader intervenes between the salesman who takes care of the “sale” to customers and the backoffice responsible for managing the practical execution of the order and management of securities thereafter.

How to become a trader?

If you want to become a trader, it will take more than just being motivated. A trader has to process information very quickly and must therefore know what influences financial and economic events (results announcement, liquidation of a company…).

Most traders usually have a postgraduate degree. A MBA is very common and as a matter of fact is now part of the baggage traders are expected to have. It will be very difficult or impossible for a self-made man to join a team of professional traders. Besides training, the trader must have great psychological qualities. He can’t afford to let his head spin when dealing with orders worth several million dollars.

The ability to deal with pressure is one of the greatest qualities a trader can have. Experience is paid with cash and annual salaries go beyond 6 digit figures (excluding bonuses) for traders with more than 5 years experience. By accepting a wage loss, a trader can later move into other financial departments if he wants to.

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