Overview

There are various reasons why people chose the career of a stock trader. Others appreciate taking risks and seeing them pay off, while some prefer working in a fast-paced setting where the work is constantly changing. If you’ve ever considered working in the stock market, it can be a successful career path. What a stock trader does and how to become one are both covered in this article.

What is a stock trader

A stock trader oversees financial investments in several equities while keeping an eye on the market. They could handle investment funds, hedge funds, mutual funds, pension funds, or other types of money. These specialists may engage in a variety of stock trading activities, including trend following, arbitrage, news trading, momentum trading, day trading, and market creation.

A stock trader is a professional, and some stock traders who trade for their own clients are referred to as financial advisors. These stock traders also serve as their clients’ advisers or money managers. Professional stock traders can operate on their own, as staff members at a large financial corporation’s office, or on the trading floor of an exchange.

The work of a stock trader

A stock trader buys and sells stocks either on their own or on behalf of a company. Additionally, they may purchase, sell, and trade bonds and other financial products. The primary goal of stock traders is normally to maximize earnings by profiting from market price changes for certain companies. They may purchase or sell shares for transactions with holding periods as short as a few seconds or as long as many weeks.

Buying and holding stocks for a long period of time, ranging from several months to many years, is possible for other sorts of stock traders. To acquire access to the shares they trade, stock traders frequently collaborate closely with a stockbroker or brokerage house.

The stock trader’s duties include doing research on the equities they are considering trading. Technical, fundamental, and environmental research are three major subcategories of corporate stock analysis, each with its own methods and beliefs. Trading professionals may select one of these research techniques or a combination of them. By using trading strategies, insight into the companies, and consideration of outside market conditions, stock research aims to reduce risk and increase returns on investments.

Since quick reactions and a thorough awareness of market conditions are required for successful trading, stock traders must control their emotions. Successful stock traders often don’t mind taking chances and are driven by a strong desire to succeed.

Stock trader’s workplace

A stock trader may conduct business anywhere, including a home office, a bank cubicle, or a trading floor. Usually, the atmosphere is frantic, thrilling, and stressful.

Some traders want to launch their own company and operate from home. Although starting your own business is intriguing, it would be beneficial to gain knowledge and experience working for someone else first.

Contrary to careers in corporate finance or mergers and acquisitions, stock traders are independent contractors. Trading on the west coast begins around three in the morning because markets open at six in the morning Eastern time. At 9:30 a.m. EST, the opening bell sounds.

There isn’t time for errands, lengthy coffee breaks, or flexible scheduling. If they are successful, traders may also operate mostly unsupervised and independently. Traders that do poorly quickly lose their jobs.

How to become a stock trader

If you’re thinking about working in the stock trading industry, you should be well-versed in the stock market and able to maximize your clients’ assets. To purchase and sell stocks for their clients, you will also need to pass an exam and receive a license. To start a career in this area, follow these steps:

1. Get a degree

A degree in accounting or finance can provide you with useful abilities you can put to use in the stock trading industry. Some businesses will provide you with comprehensive training courses in which you will discover the fundamentals of buying and selling stocks.

2. Finish an internship training

Consider doing an internship if you want to work as a stock trader and are a college student. You will see the requirements of the work through this learning experience. Additionally, an internship will show you how brisk stock trading can be and teach you how to purchase and sell at the right periods.

3. Choose your course of action

Depending on what you want to accomplish, there are many distinct careers within the stock trading industry, each requiring a different level of training and licensing. You can decide what specific training or certifications you will require once you have chosen a career.

4. Pass the tests necessary for your field

Before becoming a stock trader, you must pass a set number of exams and obtain various licenses. They include, among others:

• Traders to sell the majority of securities with a Series 7 general security sales license.

• Allows traders to transact in future commodity contracts after passing the Series 3 exam.

• With a Series 63 license, you can be sure that the license holder is fully aware of the state’s securities sales rules.

• Holder of a Series 8 license is permitted to direct and coordinate branch operations.

5. Prepare your resume

When you apply for jobs, make an excellent resume that will get you noticed. Your CV should be crystal clear, succinct, and emphasize your most current education and skill set. When you begin looking for jobs, you should also write a tailored cover letter specifically for that post. Your cover letter can help your future employer have a deeper knowledge of your qualifications, which may help you stand out from other applicants.

6. Look for job openings

Start your employment hunt on job boards online. Most of them let you narrow down your search by state and city. Additionally, you can locate excellent career guidance and instructions on how to land a job. Newspapers, social media, as well as relatives and friends, are additional sources. When you locate a job that interests you, apply right away and follow up with the hiring manager a few days later.

7. Get ready for the interview

A prospective employer will get in touch with you for an interview if they believe your talents and experience match what they’re seeking for. To better prepare for your interview, do some research on the company’s industry and working environment. Be sure to send the interviewer a thank-you note following the interview to express your appreciation for the chance to learn more about the position.

8. Expand your stock trading knowledge and credentials

To optimize your potential for improvement, keep in mind to take advantage of possibilities for lifelong learning. Attend any additional training sessions or courses that your employer offers to stay current on developments in your industry. By doing this, you can ensure that you advance as rapidly as possible and boost your confidence in your industry.

Job market

The future is generally good for stock brokers and traders who work in the United States. Between 2016 and 2026, the Bureau of Labor and Statistics predicts a 6% rise in the number of jobs available in this industry. This is comparable to the national average for other occupations in terms of speed. The ongoing demand for assistance with initial public offerings, mergers, and acquisitions is probably the main driver of this rise. As the economy develops, this will only get better. Additionally, as people get closer to retirement age, it’s likely that their need for brokerage services will increase.

However, there are a few significant issues with the prospects for stock brokers and traders’ careers. It is anticipated that employment growth would stall as financial services continue to merge. The demand for stock brokers and traders has also diminished as a result of the creation and use of automated trading systems. Sales representatives who specialize in a particular area of expertise and have good customer-service skills are valued more highly by large financial institutions. The possibility of a high income also tends to attract more candidates than there are available positions in the field.

It’s also important to remember that each state has a different degree of employment. The states with the highest employment of accountants are New York, California, Florida, and Illinois, among others.

• How easily can stock traders find work?

Stock traders have a B employability grade from CareerExplorer, indicating that there should be plenty of decent job possibilities in this field in the near future. It is anticipated that the US will require 29,800 stock dealers over the next ten years. That figure is based on the retirement of 6,600 current stock traders and the addition of 23,200 new stock traders.

• Stock traders want

The Bureau of Labor Statistics indicates that growth is picking up even though the US financial sector has seen notable crises and major consolidation over the past ten years. Increased options for people of average means to invest in mutual funds and trade stocks, along with a general increase in demand for investment banking and commodities trading advisory services, could hasten the availability of trader positions. Online stock trading by amateurs without the help of professionals could offset some of this predicted rise. In general, job rivalry will remain fierce as a result of the profession’s potential for high pay drawing numerous applications.

Salary of stock traders

The median annual salary for the majority of securities, commodities, and financial services sales agents in 2017 was $63,780, according to the Bureau of Labor Statistics. The average pay for stock brokers and traders, on the other hand, is $56,117, according to PayScale. Both of these numbers are significantly higher than the $37,690 reported median annual wage for all occupations. While those with 20 or more years of expertise can earn up to $100,000 a year, entry-level stock brokers and dealers should anticipate making roughly $52,000 annually. Location also affects compensation; New York, Connecticut, Massachusetts, South Dakota, and Kansas have the highest salaries in this field.

Typically, salaries range from $37,970 to $205,440.

Earnings for stock traders by seniority

Top-level stock trader                     $98.77 per hour            $205,440 per year

Senior-level stock trader                $55.88 per hour            $116,240 per year

Mid-level stock trader                     $30.25 per hour            $62,910 per year

Junior-level stock trader                 $23.12 per hour             $48,100 per year

Starting level stock trader               $18.2 per hour               $37,970 per year

By state, the pay for stock traders

State name                    Average salary

Connecticut                               $91,620

New Jersey                               $80,200

District of Columbia                    $79,280

Minnesota                               $77,880

Massachusetts                   $77,740

Delaware                               $77,450

Illinois                               $71,540

New Hampshire                   $64,000

Nebraska                               $63,720

Rhode Island                               $63,720

Maryland                             $62,950

Tennessee                             $62,840

California                             $62,250

North Carolina                   $62,110

Maine                                         $61,900

Texas                                         $61,760

Ohio                                         $61,380

North Dakota                             $61,330

Michigan                             $61,150

Vermont                             $60,890

Hawaii                             $60,820

Florida                             $60,550

Utah                                         $60,550

Indiana                             $60,520

Missouri                             $60,280

Virginia                             $59,700

Pennsylvania                          $59,370

Georgia                             $58,150

Kansas                             $58,150

Colorado                             $57,890

Washington                             $57,460

Wisconsin                             $52,840

Alaska                             $50,380

Arizona                             $49,420

Oregon                             $49,260

Iowa                                         $49,020

South Carolina                   $49,010

Nevada                             $48,980

South Dakota                   $48,980

Oklahoma                             $48,970

New Mexico                             $48,790

Montana                             $48,650

Wyoming                             $48,540

Kentucky                             $48,500

Arkansas                             $48,460

Louisiana                             $47,760

Idaho                                         $47,680

Alabama                             $47,640

Mississippi                             $44,960

What personality qualities are present in stock traders?

Primary concerns 

The majority of stock traders are typically ambitious people, making them relatively natural leaders who excel at influencing and persuading others. They also tend to be traditional, which means that they enjoy working in structured environments and are typically organized and detail-oriented.

The breakdown of the typical stock trader’s Holland codes is as follows:

• Enterprising
• Conventional
• Research
• Social
• Artistic
• Realistic

Extensive personality traits

Conscientiousness is a trait that stock traders exhibit at high levels, indicating that they are methodical, dependable, and frequently well-prepared. They also frequently score highly on the extraversion scale, indicating that they need other people or stimulating environments to make them happy.

• Conscientiousness
• Extraversion
• Openness
• Agreeableness
• Social Responsibility

Skills to Develop

Being a stock broker or trader is not something that everyone is capable of. Professionals in this financially-related area must be exceptionally knowledgeable about a variety of clients and products. They frequently handle big sums of money and must make crucial judgments quickly, which makes their employment stressful. Additionally, promotions and commissions are frequently linked to sales. Therefore, stock brokers and traders need to develop and polish a number of crucial abilities.

• To evaluate the profitability of potential deals, securities, commodities, and financial services, one needs analytical abilities.

• Computer programming knowledge is required to examine financial goods properly.

• Customer service abilities are required to persuade clients and make them feel at ease when making financial suggestions.

• Decision-making abilities are required to act swiftly when a lot of money is at stake.

• To detect subtle changes in the specifics of IPOs, mergers, and acquisitions, attention to detail is required.

• Taking the initiative to build a clientele and market security sales to people who might not be looking for financial services.

• Math abilities are required to efficiently use mathematical tools and investment algorithms.

FAQs

What qualities should I possess if I wish to trade stocks?

It should be enjoyable for stock traders to work in a dynamic atmosphere. You should be able to maintain composure under pressure, and you’ll need to think quickly because you’ll need to make a lot of snap decisions.

Is a college degree necessary to work as a stock trader?

Although a degree is not necessary to work as a stock trader, it will help you develop the abilities you need. Depending on what you want to accomplish in the stock trading industry, certain licenses and tests are needed. Some employers can also have you go to classes and training sessions so you can learn more about the various duties you’ll be expected to perform in your career.

Which stock dealers are in demand?

As long as there is a desire to profit from the stock market, qualified stock traders will be required. There will always be a need for stock traders who can guide their clients in choosing profitable investments as long as there are people who are serious about doing so.

Is trading stocks a full-time job?

Day traders who are just starting out in this industry sometimes have part-time jobs. People who have worked in the sector for a while frequently make it their full-time profession. This can include spending many hours each day in front of a computer.

Can I operate a stock trading firm on my own?

You have the option of working for another company or running your own business as a stock trader. Both options have their own special advantages.

What is a stock trader’s salary? 

In the United States, a stock trader can expect to make an annual base pay of $80,086.

How do I become a stock trader from home?

You may instantly trade stocks from your computer or smartphone while watching stock trading videos.

Do stock traders make good money?

Only 50% to 60% of the trades that successful traders win are likely to be profitable.

How long does it take to become a stock trader?

Only 4% of people become profitable day traders. In addition, it requires six months to a year of diligent work.

How to become a day trader?

Through trading alerts, algorithmic algorithms, and financial education. Gain confidence through knowledge to turn into a successful day trader.

How to become a professional trader?

Learn the fundamentals and advanced fundamentals of trading. Create trading strategies and tactics, gain trading experience, select a trustworthy broker, and comprehend risk management.

How to become a stock broker?

Get a degree and finish your internship. Create a résumé after taking the relevant examinations for your path. Look for open openings, then set up interviews.

acquire more training and certifications to become a stock trader.

How to become a stock trader on Wall street?

Finance studies, business school, employment in a brokerage firm, licensing, and registration with FINRA are all options. learn everything there is to know about trading and maintain Study constantly.

How to become a stock broker without a degree?

Although you aren’t required to have a degree, having a bachelor’s degree makes you stand out in a crowded employment market. 

How to become a successful trader?

Use a trading plan at all times and approach trading like a business. Utilize technology Protect your trading funds, research the markets, and then create a trading strategy.

How to become a day trader with 100$?

Yes, but Locate a brokerage, select your securities, decide your trading strategy, and then begin.