Trading, do you know? White-collar workers juggling millions, Internet advertisements touting wonders (and stacks of money)
Trading is part of these little-known trades, a little out of the ordinary, that makes them talk and unleash the passions of the general public.
What is the real function of a trader and what is his career? How does this skill area work?
Trader, what is it?
If the title is both scary and dreamy, we must return to reality: a trader is primarily someone who is employed by a bank, a brokerage or stock exchange.
And you should know that there is not a single definition of trading. This word-groups distinct domains.
Trading comes from the English word “to trade”, which means to exchange. Trading involves trading, buying and selling different assets and financial products, depending on the field in which one works.
In these assets and products, we find the very famous shares – which represent a very small part of the capital of a listed company, which can be bought – but also bonds, currencies, cryptocurrencies or debts.
A trader can be interested in both classic financial products of companies and cryptocurrencies such as bitcoin for example or the price of commodities, such as oil, gold, gas …
What are the types of trading?
Two types of trading are generally distinguished:
Trading for own account
With a set amount allocated, the trader will buy assets and financial products at the best possible rate, to make capital gains.
He will choose assets, taking as little risk as possible against the expected gains on behalf of his client or his .
This is speculation – a scary word because it induces risk, sometimes on a very large scale if it is a banking institution.
If you invest in a rising market, you increase your capital, and if you do not, you lose money.
This trader pays himself if his capital has been increased (or the clients for whom he manages an own account pay him). This is a fairly criticized activity, but not the most common trading.
Conversely, flow trading is a much more widespread activity than the one done on own account.
This trader scans different markets to buy, sell and resell assets and securities at the best possible price for his clients.
As an intermediary between clients, financial operations and financial markets, he buys or sells to other clients, individuals such as banks, brokerage firms or companies.
He is asked for prices on products he manages the transaction.
It negotiates and must advance a sufficiently competitive price but also with as few risks as possible – that’s all the art of flow trading.
We do not talk about large-scale financial transactions, rather the number of transactions made – because the flow trader is paid to the commission.
The profile of the trader
Professional or particular?
Traders are most often professionals in the world of finance, banking and stock market …
But this field is opening more and more and online trading platforms can be launched to attack the markets via trading in own account. This is called “online trader “.
What are the required qualities?
Everything depends on the knowledge of the market in which one speculates, on analysis and ability to anticipate increases or decreases.
Two types of analytical capabilities are important: those relating to finances and pure market curves, see what is going up, down, and so on.
But you will need to know the news, be it economic, financial or political.
Knowing the news of large listed companies and smaller ones who want to enter the market is essential.
But a tense geopolitical situation can also reverse everything. That’s why you need to keep up to date as often as possible. It’s even part of the job.
In addition to these undeniable skills, one also needs patience and a lot of understanding of the human being.
Know when the customer (or oneself) is no longer able to take risks, where is the limit for example.
Or know how to wait to lose to better win then …
Are there training courses to become a trader?
To know: there is not a single and royal way to become a trader, but varied courses.
To join a large banking institution or a company that works in the stock market, you must show your diplomas, but also all your skills.
Such as business school diplomas, major prepare or engineering schools, coupled with cycles only in mathematics or finance.
Specialized masters in the management of banking units also exist and specialized courses in finance are open in several French universities.
For banks, an international move is a big plus.
If one wants to exercise in a personal capacity, several tracks through university diplomas or training sessions via the internet.
You have to choose training that seems complete, presents all the facets of this activity, shows you the benefits and the risks and tells you about several techniques at the same time.
This may be due to the personality of the trainer, but also to the content of the courses.
You need to understand how the stock market , which is a complex field, is the key player and how to get out of it.
These technical skills are then expanded with practice.
Start with a first training that you will have carefully chosen.
This overview may allow you to get started, you will have in any case a first overview of what is trading .
And you will know how and whether or not you want to start.
Be careful, do not fall into the traps of overpriced ads and remember that no miracle online course will make you a rich golden boy to millions.
Trading is an activity that requires serious and long-term training , that experience and your skills count for a lot in success.
It takes days of loss to win and if a formation tells you the opposite, run away.