How to become a trader? Crypto, salary, training… We tell you everything!

How to become a trader? Lhe profession of trader is the subject of all fantasies. It remains in reality different from what films or novels can sell us. Business Cool makes you discover the salary, but also the profession of trader and that of crypto trader.

Trader comes from the English word “trade” which can be translated as “commerce”. The trader is therefore a natural person who drives a market and trades. There are two possibilities for this professional: to work as an employee or as a self-employed person. If films present traders as billionaires or bandits in prison, the reality is quite different. This facet represents exceptions and not the general rule.

The job of a trader is to buy and sell bonds by constantly following the fluctuation of their price. The trader works on behalf of a bank or a brokerage firm and their clients who have committed large sums. Its primary objective is to make these investments profitable in a short time. This activity requires an ultimate level of concentration, decisiveness, a taste for risk and unfailing composure.

Do you want to work in the world of banking? Discover the recruitment processes of the biggest players in the sector!

What does the job of trader actually consist of?

The stock trader buys and sells financial assets (stocks, bonds, currencies, options, etc.). It continuously monitors stock price fluctuations in real time with the aim of generating profits.

The trader, whether self-employed or salaried, may specialize in certain assets or certain stock markets. He can therefore become a binary trader, high frequency trader, energy trader or even Forex trader. The latter invests in the currency market (exchange market).

Trader’s duties

In his daily life, a trader manages trading operations and decision-making on the markets. He has only one objective: to generate profits for his clients and, at the same time, for himself. In order to achieve this, the professional must fulfill several missions:

  • Find out about the state of the market and take into account current developments (exchange rates, new laws, new players on the market, etc.). To do this, a trader is required to maintain a good network and cultivate useful relationships over the long term.
  • Buy and sell securities that are likely to increase in value in order to make a profit. Market operators resell securities when they think they have reached their highest price and their value is not likely to fall. Generally, the professional follows the instructions of his clients to the letter, he is still required to give his expert opinion.
  • Advise and support its customers in the purchases and sales to be made. The trader must give enlightened and useful investment advice.
  • Make profits and put in place short and long-term strategies to achieve maximum profits for his clients and for himself, at the same time. In financial market jargon, this is called “taking positions”.

More generally, the trader works in the trading room where he makes quotes, deals with clients and manages their portfolio. In his daily life, he is armed with several telephones and microcomputers which transmit information in real time on the evolution of stock market fluctuations and international markets. Thanks to his expertise, he assesses risks, sets product prices and negotiates transactions.

The differences between independent trader and salaried trader

It is important to make the distinction between the profession of independent trader and that of salaried trader. The first works for his own account and invests his own savings. The internet has brought out many independent traders from home. Online trading has thus become within reach, thanks in particular to the various free training courses. In recent years, we have also seen the emergence of many crypto-traders or crypto traders, that is to say traders who specialize in subjects related to crypto-currencies and more particularly bitcoins.

Regarding the salaried trader, he is more of a trader on behalf of a client and invests his money. The institutions that employ it are generally banks, investment funds or even private companies.

Read also: Why choose an MSc in finance after an engineering school?

What is crypto trading? Focus on the crypto trader

Cryptocurrency markets are decentralized. Indeed, virtual currencies are not issued by a central authority, but rather pass through a network of computers. They are not regulated. Cryptocurrencies can be bought and sold on exchange platforms and held on dedicated wallets (or wallets). Unlike traditional currencies, cryptocurrencies have digital proof of ownership stored on a blockchain. This means that when a user wishes to sell units of his virtual currency to another user, he must send them to the latter’s virtual wallet.

Crypto trading involves trading the movements of a cryptocurrency through a CFD trading account or buying and selling that currency through an exchange.

A report published by the Cambridge Center for Alternative Finance pointed out that there are more crypto traders than ever before. Their number is indeed 35 million users out of the 139 million existing.

To become a crypto trader, you have to go through a cryptocurrency trading platform. When choosing a suitable platform, you can buy cryptocurrencies. You can then trade digital currencies or keep your tokens in your cryptocurrency wallet (wallet) until you decide to resell them. One of the best and most reliable trading platforms today is eToro.

What training to become a trader?

To become an independent trader, no diploma is required. Many training courses are available online to train in this profession and succeed in generating profits. You can thus become a trader on the internet directly after the baccalaureate. You just need to choose a serious stock broker and a reliable trading platform, like MetaTrader 4. However, it is recommended to practice on a demo account to limit the risks and become familiar with the different tools.

However, to become a salaried financial trader in a bank or an investment fund, it is required to do long studies. In France, you can take one of the following courses to claim the position of trader:

  • Business or management school diploma (specialty in finance)
  • IEP diploma (specialty finance)
  • Engineering school diploma, supplemented by training in finance
  • Professional masters: banking, finance, management, mathematics, statistics, law, economics

You can also turn to a bac+6 training:

  • Specialized Master in Finance
  • Specialized Master in Market Finance
  • Specialized Master in Finance and Risk Management
  • Specialized master finance, risk, control

The trade of trader is strongly oriented towards the international. A command of the English language is therefore essential. During your years of training you will be required to do internships. We therefore recommend that you turn to positions as an assistant trader. You will thus be able to discover this profession and ensure a good gateway into the world of finance.

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The skills of the trader and the qualities required to practice this profession

To exercise the profession of trader, you must have a very good knowledge of the functioning of the economy, statistics and IT. A good trader is also able to withstand pressure and keep his cool. He works in fact in the trading rooms which are always in turmoil.

To sum up his skills, a trader must:

  • Keep calm to survive in a very noisy environment.
  • Follow your intuition and make the right decisions at the right time.
  • Be comfortable with numbers. The trader is led to handle the figures daily and to draw analyzes from them in record time.
  • Have a very good relationship with all market players (salesman, customer, back office, etc.). It is thanks to his network, that he will succeed in having information in preview, which will help him in his decision-making.
  • Keep in mind a certain personal ethic. Clients invest gigantic sums and risk losing everything if the trader mismanages their money.
  • Assume the playful side of the activity and keep in mind that sometimes you win and sometimes you lose. The trader can afford to take risks, but he must still control himself and be someone responsible so as not to jeopardize the professional lives of others.

The trader’s salary

It is impossible to specify the income generated by independent traders in view of the disparities between them. However, the salary of salaried traders is made up of a variable part (bonus) and a fixed part.

What is the average trader salary in 2021? In France, the average salary of traders in banks would amount to 70,000 euros per year excluding bonus. It mainly depends on the banks and the seniority of the traders. Juniors earn an average of 4,000 to 6,000 euros per month. Bonuses are capped but can reach up to 8 times base salary.

In the United States, traders’ earnings are much higher, with uncapped bonuses of up to millions of dollars per year. Unsurprisingly, it is therefore in New York that we find most billionaire traders.

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