For some people, the world of stocks, trading, and high finance is an exciting prospect and a great career option. However, becoming a day trader isn’t for everyone. There are many things to consider before choosing this type of career. Here are 10 steps that you need to consider before you decide to break into this exciting field.
1. Know the Type of Trader You Want to Be
There are different types of traders, so you need to decide which is the best career choice for you. The options are flow traders (buying and selling for bank clients), proprietary traders (buying and selling for banks), and sales traders (work as go-betweens for clients and the market).
2. Get an Education
In order to get hired as a day trader, you will need to have an educational background in business and finance. If you are choosing your university degree, and trading is interesting to you, look for degrees that involve business and finance.
3. Do an Honest Self-Assessment
In order to be a successful day trader, you need to have a particular mix of skills, knowledge, and personality traits. You also need to be committed to the lifestyle of a day trader. You need to have good math skills, an excellent background in finance, and understand behavioral psychology. You need to ask yourself if you are ready to work long hours, be constantly learning, take risks, and be totally committed to your career.
4. Do an Internship
Companies are looking to hire day traders who are experienced. One of the best ways to gain experience is to work as an intern. You may even get lucky and find yourself a paid internship, but don’t pass on the non-paying ones. You may not get a salary, but you will earn valuable experience and knowledge. Another way to learn is to practice, and you can do this at BoilerRoomTrader. It’s a game which helps you to invest in real companies with fake cash.
5. Get Some Money
Before you can start working as a day trader, you need to have money. Even though you will be working with other peoples’ money, there will be times when there are losses, and you have to cover those losses. You need to have working capital.
6. Know the Markets
No matter how much education you have, you must be constantly learning because the markets change all the time. You need to know the markets and be able to anticipate changes. Even the simplest details, such as regular trading hours and what happens during holidays, need to be in your head at all times.
7. Pass the Test
Once you have your training, you need to pass a Series 57 certification exam. No matter how much knowledge and training you have, you can’t get a job until you pass this exam and become a licensed trader.
8. Know What Securities to Trade
Different types of trading methods are used for stocks, options, mutual funds, futures, and ETF’s, and you need to understand each one in order to know which securities you should be trading. The less you know, the more problems you are going to end up running into.
9. Get a Charting Software and Trading Platform
Once you are ready to begin trading, you need to choose the best charting software and a trading platform. The software and platform must support your style and strategy, and not the other way around.
10. Get Your Office Set Up
Finally, all that is left to do is get your office set up so you are ready to work as a day trader. You will either be working at a firm’s physical location or from home. Either way, you need to have space to work, the right software, and a quality computer and monitor.
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