Is becoming a stock trader right for me?
The first step to choosing a career is to make sure you are actually willing to commit to pursuing the career. You don’t want to waste your time doing something you don’t want to do. If you’re new here, you should read about:
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How to become a Stock Trader
To become a stock trader, there are no strict requirements, however a degree in finance or accounting is helpful. Most companies that hire stock traders put them through an in-depth training program to teach them the specifics. College students thinking about becoming a trader can try to get internships at brokerage firms to learn more about the job. Some traders get their start by helping other traders on a trading floor, and by initiating trading accounts.
Traders will need to take exams and complete certain license requirements. The licensing requirements are enforced by the National Association of Securities Dealers (NASD) and the Securities and Exchange Commission (SEC). Different licenses are required depending on job specifics:
- A Series 7 General Security Sales License to sell most types of securities
- A Series 3 exam enables traders to deal in commodities futures contracts
- A Series 63 License is needed for state laws for securities sales
- A Series 8 license is for traders who supervise sales and manage branch activities
The Financial Industry Regulatory Authority's (FINRA) website has more information on licensing.
Becoming a stock trader requires an interest in finance, a technical mindset, the ability to use computers and understand sophisticated trading software, and a willingness to do research.
The ability to stay calm and think clearly under pressure is important as well, because stock traders who trade a client's money or funds that belong to their corporate employer will have days when they may lose large sums of money.
Additionally, a stock trader must be able to get past emotional barriers in order to make good trading decisions since quick reactions are necessary as well as a good understanding of market situations. Stock traders who do well are typically not afraid of taking risks and have a burning desire to make money.
Some people prefer to start their own trading business and work at home. Entrepreneurship is appealing, but getting training and experience as a trader employed by someone else would be helpful before going it alone.