What Is a Stock Trader and How to Become One
Table of Contents
What Is a Stock Trader?
A stock trader (also known as a stockbroker, securities trader, or equity trader) researches stocks, then either buys and sells on behalf of their clients. In addition to trading stocks, they network with possible clients; conduct thorough and reliable research; and build trusting, lucrative relationships with investors. A stock traders job is to navigate the complexities of investing in the stock market and guide clients toward sound investments ethically and professionally.
How to Become a Stock Trader
To become a stock trader (also known as a stockbroker or equity trader), you should have a master’s degree in business (MBA) or a related financial field, though there are some stock trader jobs that do not have strict education requirements. Then you need a job or internship with a firm that is registered with FINRA (Financial Industry Regulatory Authority), which will act as a sponsor for your licensing exams. Most states require the Series 7 and Series 63 Exams, which cover financial topics and state and federal laws in relation to securities trading.
How to Be a Good Stock Trader
A good stock trader has the right blend of market knowledge, sales skills, and communication skills. Be competitive—this is a highly competitive field, so it is important to identify market trends before other traders. Staying ahead of the market is how you make clients money, and how you attract other high-profile clients. Good traders are also familiar with the needs client—understanding the level of risk they’re willing to take and their objectives.
How Do Stock Traders Make Money?
Stock traders work on commission. A client will give a stockbroker a specific amount of money to invest, and the trader advises the client regarding the stocks and makes trades on their behalf. For some brokers, this is a flat fee per trade, while others work on a spread or percentage basis.
What Software Do Stock Traders Use?
There are many investment software options out there for amateur day traders, but many large professional firms have a proprietary software platform that they use in-house and to interface with investors. Spreadsheet programs such as Excel also helps stock traders keep track of investment activity.
