Three Top Skills for a Wall Street Trader
Most of those who want to pursue a career by trading in common stocks, conducting stock exchange transactions with bonds or on the commodity exchange have watched a cult film that has become a classic of this genre - Wall Street or its sequel, Wall Street: Money They Don't Sleep ”(Wall Street II: Money Never Sleeps). The older readers are inspired by the image of the ambitious careerist Bud Fox played by Charlie Sheen, while younger readers prefer the image of the cunning trader Jake Moore created by Shia LaBeouf. But we can all agree that ultimately everyone wants to become none other than Gordon Gekko, whose role was played by Michael Douglas. For a successful company, his major deals could turn into even greater success or utter collapse.
These characters made many students dream of boarding up millions on Wall Street.
Regardless of which particular image of a Wall Street trader is closest to you, the real people working on the stock exchange in such companies as Goldman Sachs, JPMorgan, Morgan Stanley, UBS served as prototypes for their personalities. And if you want to become one of them, then you will need certain skills.
Mathematics plays an extremely important role in trading, but not all transactions are concluded equally. If you want to gain insight and master the techniques of algorithmic trading, then at least you should be able to conduct calculations ahead of the curve and, possibly, even have a degree in physics or engineering. However, in the lighter branches of trading, you will need knowledge from a basic course in mathematics, it is especially useful to remember the theory of probability. According to Peter Lynch, CEO of Fidelity Investments:
Anyone has the brains to follow the stock market. If you know math at the fifth grade level, you can do it.
In any case, you need to be able to perform these seemingly simple mathematical operations in real time in relation to markets. Imagine yourself a poker player who needs to calculate all the potential chances and moves of each of the opponents. As in any other case: the higher the risk, the greater the reward. So one day, when you go beyond the scope of simple short-term and long-term trades and begin to engage in operations with derivative financial instruments and derivatives, you should expect that mathematical operations of a different level will be required here.
For example, if you want to use the trading method CAN-SLIM, which was invented by the founder of the business newspaper Investors Business Daily, William O'Neil (William O'Neil), then you need mathematical knowledge at the college level. If you want to improve your knowledge of mathematics with the help of mathematical courses, then look for them on sites such as Coursera or Udacity .
Market conditions are unpredictable. Traders monitor the Bloomberg terminal and always try to make a plan for next steps.
Many traders draw up a trading plan, which they strictly follow. This personal plan has been drawn up over time. Different traders have different capital, different risk tolerance, product orientation and decision-making models. A plan is a systematic program that dictates when to take part and when to leave bidding, and for each action there is a programmed reaction. The plan must be reliable, and you must always adhere to it.
In the end, this will help you minimize risks and avoid making the wrong decisions. Market conditions are always changing, so a good trader may even have several trading plans. Even the best and most talented Wall Street trader follows the plan. Listen to the traders and commentators of the Fast Money talk show Guy Adami and the Najarian brothers.
Make a plan. Do not chase the market. Take a position appropriate to your willingness to take risks. At least, this way you will be able to hold out in the game longer.
If you are not able to make a plan, then consider that you have already failed. Think you need to work on your trading plan? Then look for online guides that can help you put together an effective trading plan. Then test your plan with the Chart Game . If you have long-term prospects, then try to make several transactions with securities on Yahoo! Finance .
The stock market can be compared to a roller coaster. The price level of individual financial instruments on certain days may vary depending on the mood of the investor, trader or speculator. Thus, playing the stock exchange every day is not a task for the faint of heart. When thousands of dollars or more are invested in a deal, it is difficult to remain indifferent. Only fools believe they will succeed in every trade. Traders need to learn how to stay calm and cool in emergency situations.
As Kenny Rogers sang to us, there is only one skill that can help you out: “You need to know when it is best to hold the card, when it is better to fold and to know when to leave.” In fact, discipline is developed with practice.
According to Jim Cramer, the presenter of Mad Money, one of the best ways to maintain discipline is to stick to companies you know and believe in. You also need to enter into transactions for the main company profiles. So move it and start training on the software demo, which most accurately simulates the real situation. Keep your plan in a conspicuous place near the computer and as soon as you feel that you are beginning to deviate from it and incur losses, take a break.
Keep your composure, try to visualize your program of action and analyze errors. More importantly, start with small deals and as discipline grows, you can take more and more risk. Follow these tips and after a while you will become a trader with strict discipline.
In both Wall Street films, Shia LaBeouf, Charlie Sheen and Michael Douglas effortlessly operated with financial instruments. However, the harsh reality is that building a career on the stock exchange every day, from Monday to Friday, from 9am to 5pm, means experiencing constant stress and pressure. Markets may be volatile, and investment pricing extremely volatile. All together leads traders to such an emotional state, as if they are rolling on a roller coaster. But this must not be allowed to interfere with the pursuit of a career in trading.
If you want to gain an advantage over your competitors, you may even have to pay attention to one of the many online trading courses ( there are online and offline courses and seminarsin Russian - approx. perev. ) Every day, thousands of traders are ready to earn millions of dollars or lose them. Sometimes even those who lost everything at the end of a year can still count on a decent bonus at the expense of their employers from investment banks.
It is very difficult to resist the temptation to receive dividends at the end of the year. Just make sure that you have sufficiently honed your trading skills - mathematics, planning and discipline. This must be done before taking on such responsibility.
Attention! In ITinvest, a vacancy for the C # GUI developer has opened, the job is to implement front-end development of software products for trading on the exchange. Details linkwww.itinvest.ru/about/vacancies/programmer-gui-c .
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