1. Your Questions About How To Invest In The Stock Market
For Dummies
David asks…
How to become a trader?
I am a 16 year old boy living in Canada. I want to be a trader when I grow up. Finance/business
is my passion. I wake up every morning reading up the business news just for kicks, even
though the material there hardly applies to me. I have my own stock simulator account. In my
spare time I read finance/investing/trading books. Every "for dummies" book relating in the
slightest to finance/investing/trading I have read, and a plethora of other books. I have a
passion for it!
Academically, I am excellent. I live in Canada so we don't use GPA's (at least in my school) but
my scholastic average is at 94% (top 1%), whatever the equivalent is in terms of GPA... so you
can definitely say that I'm very intelligent.
Now, the question I have to ask is how one goes about becoming a trader? Does one apply to
an investment bank and join the trading department or something, or are there separate trading
firms that one joins. My dream is to become a prominent fund manager of some kind, though I
do acknowledge that might take a while, if I am capable of fulfilling that dream at all!
In regards to university education, for my undergraduate I will NOT be going to Ivy league or
any other US university. That is because me and my family are not particularly wealthy, so we
can not afford to pay tuition to such a privileged (or overpriced, whatever you believe) school,
and we both agree that taking time off from my valuable studying to work at a job would be
detrimental to my education. So to make things short, I'm staying in my local university, which
is pretty highly regarded in Canada anyway. The reason I'm mentioning this is that I have heard
that education, upbringing, and status does not mean as much as intelligence,drive, and
ambition Is this true? Do I have a chance? Like Gordon Gecko said "Id rather have a poor,
hungry, smart man over a Harvard MBA"
Also, I have no intentions of working on Wall Street immediately, instead, Canada's equivalent,
Bay Street, would be satisfactory, at least for now. I would probably work for one of the big
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2. Canadian investment banks, like CIBC World Markets, or TD Securities, to name a few.
So to recap, how does one become a trader, whats the daily life of a trader like, requirements
for being a trader, and your opinion on Canadian Investment Banks.
Mind you, I won't be entering the work force until 6 or so years once I finish high school and my
undergraduate, so I am hoping for the financial sector to repair itself by then. Any possibility of
this?
LASTLY, sorry for the long post. I prefer to ask an extensive question so that I may get more
extensive answers Thank you
Thank you for all your responses. Firstly, Im awesome at chess, so thats a plus for me Im also
good at quick mental math as well. However, what I am not a big fan of is overly complex
mathematical formulas. They sort of bore me, but not that I am not good at them! So I suppose
being a "quant" is sort of out of the question. After all, if I liked complicated mathematical
formulas, I would become an engineer/mathematician, though I do like SOME math to be apart
of my job. If trading is like chess is some ways, then I would be VERY happy. But first and
foremost, I would like a job that is intensely meritocratic.
I always thought research analysts were the math heavy job, and trading involved more
economics. Knowing market psychology and what affects what...if interest rates fall, how do I
capitalize on that? etc. Correct me if I am wrong here
And lastly, I'm not talking about trading as an activity, I am talking about be a professional trader
in an organization/firm/fund...not ju
Steve Winston answers:
Hi there me again,
I'm in the same boat as you are, looking for a future career in trading or brokering. I'm currently
saving some money to open my own account on something like E trade and just starting at day
trading, particularly in the realm of future stocks. Of course to handle someone else's money
you have to become licensed through the Series' exams (remember that the Series 7 is the
most important and a thing like a Series 6 is used only for commodity trading). Knowing the
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3. math and technical part of the business will make you more than efficient in how to do your work
but it is also important to know everything going on in the news. A civil war in Africa could
drastically change the price of minerals or even a thing like chocolate prices just as much as a
hurricane in Latin America can influence lumbering or transportation industries. This may seem
obvious but in the headlines it never makes that connection, the news is only to report and
never really elaborate. I live in Minnesota and when a meteorologist says there is snow coming
during the winter months one only thinks "damn, its going to be cold, windy, and icy. Just my
luck." We forgot what a blizzard does to an economy and in this example how that can influence
something like salt prices. And when the snow withers away, salt demand and therefore price
falls. Little things like this can help us predict when to sell or buy. Of course, there are many
other factors. But when focusing on the industry of day trading or future contracts it is a lot of
the time information outside of corporate offices that can make the difference between a kill and
a bust.
Best of luck with the goal of becoming a successful stock manager or trader. It should be noted
that more times than not traders end up in bankruptcy as well as a lot of stress that can take a
toll. There is a professor at our school who used to work on Wall Street and the one thing that is
always the same in his stories are the drug and alchohol abuses that can plague a trader. Of
course, I'm not saying this will be your future, or mine at that matter, but the life inside the
investment world can leave its burden both mentally and physicailly. But it is the ones who have
the hunger to always succeed and make it past the down times that eventually are running
places like J.P. Morgan or Goldman Sachs.
I feel like we could offer each a lot of advice and answers so don't be bashful about posting
more of these awesome questions.
-Joe P
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