How To Become a Stock Trader (With Job and Salary Info)
Updated 8 September 2023
From the outside, being a stock trader looks like an incredibly lucrative job. By buying and selling stocks and shares for a profit, a stock trader can work either for themselves or a client to build up the value of portfolios to ultimately earn money. This seemingly simple job comes with a lot of challenges. In this article, we explain how to become a stock trader and some of the skills you might want to do the job more effectively.
How to become a stock trader
There are a few simple steps you can follow and learn how to become a stock trader:
1. Start trading at home
If becoming a stock trader is something you've only recently looked into, one of the first steps to take is to start trading at home. This doesn't need to be with large sums of money, and it may even be just tracking the market and making predictions without investing money. The importance of this is to make sure that you can see patterns and predict movements in financial markets.
This is because once you get into a stock trading role, you may be dealing with large investments, and bad judgement could lead to you costing your clients money. Managing your own fund can allow you to improve your judgement, study the markets and essentially practise before you take up a role working with client investments.
2. Look for apprenticeships
Before you move on to having a full role as a stock trader, it may be ideal to look into an apprenticeship. In a stock trader apprenticeship, you can learn some more of the skills you need to excel in the world of financial trading, all whilst the risk to your clients' finances is limited by your supervisor's expertise.
Furthermore, doing well in an internship can often lead to a job in the same financial firm. If they believe you have a high level of talent and complete everything they ask to a high standard, very few companies want to let your potential go to another company. Performing well in an internship can create many new professional opportunities.
3. Keep a record
One of the most important things you can do on your way to being a stock trader is keeping a detailed record of your trades. You may be able to pull off a highly successful trade, but you can't use it in interviews if you don't have a paper trail. It's important to take note of the following aspects of your trades:
time and date of completion
whether the trade was a buy or sell
the stock being traded
why you made a trade
This information can benefit any interviewers and can act as a strong case study for your suitability for the role.
What is a stock trader?
The role of a stock trader involves buying and selling stocks. A stock trader uses the instability and natural variance of financial markets to find value increases, selling at the right time to ensure that they, or their clients, can profit from the variance within the markets.
There are a few different ways that stock traders can do this. They can look at long-term financial trends and invest in stocks that they forecast to rise, slowly accumulating value over a period of years. Stock traders can also embrace a more short-term ideology, focusing on stocks they think are going to surge and cashing out before the next dip in a more high-risk strategy. They may even attempt a combination of the two. In both cases, the underlying goal is the same: to increase the value of the portfolio.
What responsibilities do stock traders have?
There is a range of responsibilities held by stock traders, all of which are centred around ensuring that the money you manage is kept as secure as possible and that the value of the stock trader's portfolio rises instead of falls. Here are some of the responsibilities held by a stock trader:
Oversight: A stock trader keeps an eye on the way that financial markets are acting, in addition to the entirety of a client's portfolio.
Analysis: It's the responsibility of any stock trader to look at the state of financial markets and analyse them to discover trends. You can then use these trends to improve financial results.
Customer relations: Every client is effectively a customer that comes to you for a service. It's the role of any stock trader to manage their customers in a friendly and professional manner.
Forecasting: Collating and assessing data is important, and converting this into a financial forecast can keep your client up to date and happy with your service.
Completing trades: This is the most practical part of the role, but mistiming trades could lead to suboptimal gains and may even see your client make a loss.
What career paths can you take?
There isn't a set route to becoming a stock trader. Stock trading is open to people from any educational background, although taking the right courses can help you on the way into a stock trader role. Here are just a few career paths you can take to become a stock trader:
Manage your own portfolio as a case study
One of the most important things for any stock trader is their proven experience. If you have no qualifications, but you've proven yourself to be a talented trader anyway, you can present that as a case study to recruiters. The most important thing in the business of stock trading is noticing value where other people may not, and the same concepts apply whether you're managing your own small portfolio or dealing with a client's investments.
You can start with retail trading apps and keep track of what trades you made, when you made them and why you made that decision. This might slowly build into an extensive portfolio that presents your way of thinking regarding financial decisions. This can be a beneficial tool for recruiters, as you can give them a full understanding of the way you see finance and how you'd fit in with the company's culture.
Whilst there are relatively few degrees that offer a guaranteed route to becoming a stock trader, there are some that can give you the skills you require to break into the industry. These include courses such as economics. Economics helps you effectively study trends, past case studies and apply theory to forecast financial results on micro- and macroeconomic scales.
What skills are important for a stock trader?
There are a range of skills that are important to hone if you wish to become a stock trader, some of which you may not typically anticipate. Below are just a few of the skills that may be vital for your success as a stock trader:
Interpersonal skills: It's important to build relationships with both customers and your network in the world of stock trading to make the most of every opportunity.
Analysis: You should evaluate the trades to give you a better level of insight into the state of the market and what you can do to take advantage of it.
Mental stamina: It can be difficult to establish what trades to make and when to hold, especially when trades go wrong. A high level of mental stamina is key to working in this situation.
Working well under pressure: You may make split-second decisions, and staying calm can keep you focused on the task at hand.
Independent thinking: If you follow the crowd in trading, your gains might be minimal, and the losses could be large. Thinking outside the box can bring significant financial results.
How much does a stock trader make?
The national average salary of a stock trader is £50,083 per year. This can vary depending on the company you work for, where you're based, and the details of your compensation package. You may also be eligible to receive commission or a percentage of the gains you make for your clients.
Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.
Explore more articles
- How To Become a Construction Estimator: a Step-by-Step Guide
- 10 jobs that don't require maths (with salaries and duties)
- What Is a Life Coach? Essential Skills and How to Become One
- What is it like to be a flight attendant? (With salary info)
- The role of an electrical design engineer: duties and skills
- What is a client service associate? (Definition and skills)
- How to become a school counsellor (definition and skills)
- Freelance work: everything you need to know about freelancing
- 13 types of publishing careers (plus duties and salaries)
- Health and safety officer responsibilities (plus tips)
- How to become a community manager (with salary information)
- A guide on how to become a farmer (plus skills and salary)