(treyd-ing) (n.)
The practice of buying and selling securities, commodities and similar financial services. Most financial traders work in financial firms or mutual groups to invest in various financial options. Financial traders investigate the background and financial data of many different investment opportunities, buy and sell stocks and bonds, monitor financial markets, understand the hallmarks of strengthening or weakening markets, and make wise investments with their own funds or those entrusted to them.
Traders typically determine which investments will be made by a financial firm and have a dramatic influence on the success of such businesses. Most traders work with companies that advise clients on which investments to pursue or pool resources into a large fund designed to earn investors a percentage of interest. Traders typically make money based upon the success of their investments, rather than the fees and related costs associated with financial advisors. Most traders work in office environments with the latest trading software and equipment. Traders must have a firm grasp of technology and electronic trading platforms that enable transactions in under a second.
Most employers expect a bachelor's degree as a minimum educational requirement. Employers regularly prefer a master's in business administration or a related advanced degree for traders who work alone or as part of a small team. All traders who buy and sell using funds other than their own must register with the Financial Industry Regulatory Authority and obtain a license to trade. Certification obtained from the CFA Institute can bolster a candidate's resume. Important qualities for this profession include analytical, decision-making, problem-solving and mathematical skills. An eye for detail and ability to react quickly to changing conditions can dramatically increase the chances of success in this role.
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