If you have ever seen stock traders on TV, you might have wondered how to become a trader on Wall Street. Being a Wall Street stock trader is not easy, but that is why they make so much money. Wall Street has change dramatically over the years due to technology, but there are still human stock traders on Wall Street. The following points are necessary to become a trader on Wall Street.
How to Become a Trader on Wall Street
Learn Learn and Learn some More!
This may sound obvious, but traders are not dumb by any means. To work on Wall Street, you have to know a ton of information, not only about finance, but business in general. There is a ton of math involved in trading stocks. Although college is not necessary, I would highly suggest working toward an MBA with a finance concentration. Try to finish in the top of your class, for this will get the most attention of investment banks and other trading companies.
Pass your Exams
In order to trade stocks for a living, you have to pass the Series 56 exam. This exam tests your knowledge of government policies concerning the markets, trading strategies, and much more. It is not a hard test by any means, but if you achieved step one in this process, the test should be a breeze.
In addition to the Series 56, most traders have passed the 7 and even 65. Passing these exams will help you obtain a trading position big time. When combined with a MBA and good connections, you should be well on your way to becoming a trader. In order to sit for the Series 7 exam, you have to be “sponsored” by an institution. Although it can be difficult landing a position without your 7, be on the lookout for any internships that will help you pas your Series 7. You must be employed by a financial institution to hold your license, but there is a two year gap that allows you to search for other employers without sacrificing your securities license.
In addition to passing exams, be researching financial modeling and trading strategies. The highest paid traders have passed every exam out there, have an MBA, and have a tool box of investing strategies they have mastered. Becoming a trader on Wall Street is not easy, but once you get that first bonus, it will have all been worth it.
Get the Job and Dominate!
Be ready for a stressful, but rewarding career.
A lot has changed on Wall Street since 2008. You should be willing to take any entry level position that is with a company you want to work with down the road. Once in an entry-level position, learn everything you can about the business. Go the extra mile and learn about the industry on your own time. You will soon move up to an assistant analyst position, where you will learn even more. As with any goal you may be after in life, work your butt off to achieve your goal. Eventually, your work will be seen, and you will move to a trading desk.
What do Wall Street Traders do?
Traders are the main people in an investment firm or exchange. They analyze different investments to see if they’re worth the firm’s risk. Traders work in different markets, such as equities, bonds, Forex, and many other investments.
Although many people see Wall Street traders yelling buy or sell, but today, its quite the opposite. A traders’ main job is research. At an investment company, a trader can be assigned certain clients. The trader is responsible with creating an investment strategy that best suites the client. As with any job, performance is crucial. This means you must make money, or get the ax.
The Future of Traders
Every job has been affected with the influx of technology. Stock trading positions have not been left out of this transition either. Banking jobs, such as bank tellers, have all but been replaced by artificial intelligence. I truly believe traditional banking jobs are on the way out. Although it hasn’t completely happened just yet, I believe investment funds will be managed by AI in the near future. The AI technology is actually able to trade with emotions, much like humans. Don’t let this discourage you from becoming a stock trader, but this should raise concern.