Becoming a trader: A guide to trading like a pro in the short term

The profession of trader is a dream come true for some. It is a profession with an image of success and wealth. With all that has been seen and said, especially in the cinema of the 1990’s – 2000’s, one could almost believe that it is an easy job where earning money is a given. If we add to this mirage the explosion in the number of opportunities in this sector on the Internet for almost 20 years, all of which seem to be more profitable and miraculous one than the other. It is the benchmark for all kinds of scams. All the more so for laymen who don’t really know what it is to be a trader. They have just been lured by the sirens of colossal sums of money at their fingertips with just a few clicks.

So that you are better equipped to deal with these risks. So that you know what you need to do to make your trading dream come true. Our review explains everything you need to know about trading and online trading.

What does a job as a trader consist of?

If we had to summarise the diversity of tasks, linked to the financial markets, that a trader can do, we could say that there are 2 main types of investors:

  • those who work for individual clients
  • those who work for banks

become a trader

As far as the first category is concerned, these traders are in a way the “wholesalers” of the financial markets. They are the ones who provide liquidity in the different stock exchanges. They offer their clients products at a certain selling price and trade them to resell them at a higher price. Their remuneration is largely derived from the spread between the selling and buying price. These traders are often specialised in one area for increased performance: forex, stocks, bonds, etc. Their mission is not to take risks by trading with their clients’ money.

The prop traders (who do proprietary trading), on the other hand, speculate with money from the banks. Their aim is of course to make juicy, risky financial investments so that the banks can make extra profits. It is these traders who have been in the spotlight during the subprime scandal or Jérôme Kerviel in the Société Générale affair. They are high-yield investment specialists who handle large volumes of money.

How much does a trader earn?

There is a taboo in UK about money. Especially when we talk about high incomes. Professional investors are part of those professions which, in principle and according to popular belief, earn a lot of money. Even when they start their careers. What is the real situation?

Several cross studies have been carried out with junior trader jobs, with less than 10 years experience. Statistics show that they earn on average around €30k per year excluding bonuses. This variable is really difficult to evaluate since it depends on a number of factors linked mainly to the company for which they work. But with these performance bonuses, their salaries can rise to €100k per year.

it was easier to obtain information about the income level of a senior trader. The salary trader was assessed in 2019 with certainty. On average a professional trader with a long career earns an average of €297k annually, including bonuses.

The wages referred to here are those for professionals who have been trained to become traders. Often coming from higher education courses who have either chosen to work for a company specialising in High Finance (management of pension funds, wealth, provident funds, etc.) or graduates who have decided to become independent traders by managing their own asset portfolio.

What are some of the ways you can learn about trading?

How to become a professional trader? There are, of course, several methods to learn how to trade. These are subdivided among them with more or less general or specialised approaches depending on the objectives and the learning context. We will present the 3 main areas of trader training: higher education, private training and self-study.

Which study to become a trader?

There are 3 types of higher education courses to get a trader’s job: business schools, engineering schools and universities offering a finance-oriented curriculum. Whichever approach you choose, you should allow a minimum of 5 years after the baccalaureate before obtaining your diploma (Bac 5). Higher education courses are often followed by a postgraduate course in finance, often with a practical internship in a company in the sector: trading room, foreign exchange market, operator at the Paris Stock Exchange, etc…

As trading is an activity focused on international exchanges, it is strongly recommended to master several foreign languages, with business English at the top of the list of course. We would add, for those who wish to venture into a front office environment after graduating in finance, a solid grounding in mathematics plus experience either in banking or the stock exchange are strongly recommended for a non-traumatic integration.

In UK, the business schools offering this training geared towards finance on the stock markets are HEC (Haute Ecole de Commerce in Paris), EDHEC (Ecole Des Hautes Etudes Commerciales in Lille, Nice and Paris) and ESSEC (École Supérieure des Sciences Economiques et Commerciales in Cergy).

The engineering schools that train the traders of tomorrow are all located in Paris with Polytechnique, Centrale and Ponts ParisTech. They are known for training the elite of high financial institutions that integrate the most prestigious functions in large companies or the State.

The Parisian universities Paris Dauphine and Pierre and Marie Curie (Campus Paris 6) offer their students applied trading courses with a good reputation.

The existing appellations are varied

  • business or management school diploma with a specialisation in finance
  • iEP diploma in finance
  • engineering school diploma with additional training in finance
  • professional masters: banking, mathematics, statistics, etc.
  • specialised master’s degree in finance

You learn to speculate, to keep your cool, to manage volatile products and to do graphical analysis in order to be profitable and win on the stock market.

Alternative training courses

Unfortunately we cannot all join these famous “grandes écoles” in order to become a trader. There are many private alternatives to receive a solid training in stock market investment and to obtain a trader’s diploma crowned with a job in the field.

Private schools or training centres have expanded their courses to meet the high demand. Like their cousins, these schools do not have an international reputation, but provide high-quality training, often led by professionals (or former experts) in the sector. This brings a practical and realistic dimension to the situations a trader faces every day

This type of establishment also has the advantage of being present in a large part of the country (particularly in the major student cities) and allows for the integration of students from a wide variety of backgrounds: retraining, reintegration, resumption of studies after a first professional career. Most of the diplomas awarded are recognised by the State (and therefore by companies).

It is also possible to take a job in a bank or financial institution and then move internally. International groups represent great opportunities of this kind

For jobseekers, if a career as a trader stimulates you, you should contact your local agency to find out about a training course for jobseekers in the employment sector, the costs of which can be fully or partially covered as part of your return-to-work support, in parallel with your compensation.

Self-taught training

Is it possible to become a trader without a diploma? The answer is yes. Under certain conditions

The Internet is an infinite source of information. It is therefore possible to learn the basics of trading by browsing specialised articles, expert blogs or other video tutorials that explain the complex mechanics of the financial markets. It is therefore imperative to be patient, curious and humble in order to hope to progress. If your objective is to become an independent trader or a home-based trader you will need to be confident in your ability to manage your asset portfolio serenely despite the stress caused by your new job. Understanding the psychology of the trader is an essential point to hope to succeed on your own.

The other point of vigilance is the source(s) that will be used to train you. Without basic knowledge it is very difficult to sort between relevant data and digital fables. Furthermore, in view of your future business, which is naturally oriented towards online trading on a specific platform, we advise you to rely on a regulated broker. That is to say that it has received all the certifications from the AMF (Autorité des Marchés Financiers), which is a guarantee of reliability

The main advantage is that this broker facilitates your access to a large number of financial instruments. The processing interface is very often optimised for fast and secure financial transactions. Commissions are relatively low. You work for yourself alone, without the pressure of customers. A regulated broker, such as eToro or IQ Option, for example, has a vested interest in you being well-trained – and therefore competitive – since it is mainly remunerated on your transactions. The better you manage your portfolio, the more capital you build up. So you open more positions.

The self-taught training via a broker revolves around webinars, live trading, expert articles and sessions to decipher stock market charts and news. Little by little, you will integrate the higher levels of knowledge to always progress.

Our trick is, when offered by brokers, to try trading on the stock market in real conditions with a demo trading account.

What about career in all this?

We answered different questions: how to become a professional trader? How to become an individual trader? Or how to become a home trader? The methods to follow a trader training are multiple and varied. Their goal is the same: to learn how to trade in order to make a living from it. But does the trader job have a career plan?

become a trader

This thinking is mainly oriented towards all graduates who end up joining a bank or financial institution as employees in most cases. Earlier we mentioned the possibility of doing internships as part of their higher education course. This is often an opportunity to discover the job of assistant trader and to follow the tasks performed by a senior trader. When this internship becomes a job, the student is employed as a junior trader with a limited portfolio and limited risk transactions. During this period he will surely specialise in a particular field: currencies, equity, treasury bills, commodities etc. He can also become a Market Maker by having a strong presence in the markets with a competitive trading policy. One also speaks of a market operator.

After a few more years, as a senior trader, he can move on to financial professions such as portfolio manager (client or company), corporate treasurer or financial analyst for example. His expertise can lead him to a back office position to ensure that orders, their collection or the legal dimension are properly managed. This is more of a financial supervisor position with varied missions.

For their part, independent traders can build up their own business by first developing their own assets by building up a solid capital base. This is called own-account investing. Then by developing a client portfolio by offering specific services: assets, provident funds, private funds, etc. It’s an opportunity for them to boost their own investments thanks to this influx of money, while earning commissions on the profits. Long-term investment strategies are often used, in order to secure the client’s funds as much as possible.

Finally, the main career path for individual traders is to develop their personal capital in order to become financially self-sufficient. Becoming a self-employed trader with the necessary training, determination and vital curiosity can be a unique opportunity to offer oneself a new professional and financial freedom. Vigilance is required at all times, both with regard to the service providers they use and the emotional management of such a solo profession.

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