how to become a financial trader

There are many ways to develop your career as a financial trader. From starting out in a full-time trading role for a financial company after finishing college, to making it on your own by learning how to trade in your spare time. You can become a financial trader by trading part-time and different routes will suit different lifestyles.
Financial trading is an appealing career choice for many people. You can earn a good wage and many of the roles are full of exciting opportunities. However, it can take a lot of dedication and it requires certain skills and the right mindset. If you are determined and serious about becoming a financial trader, follow these five steps to turn your dreams into reality.

5 Steps to Become a Financial Trader

1. Conduct an Honest Self-Assessment

Developing not just into a financial trader, but a successful one, has a number of requirements. You must conduct an honest self-assessment to ensure you meet all of the criteria required to become a financial trader.
Some of the most important skills to have include:
– Emotional control
– High level of focus
– Flexibility
– Analytical abilities
– Market knowledge
– Risk taker
The role of a financial trader also involves long working hours, a lot of hard work and self-learning. If you are happy with these conditions and have the right mindset to put in the effort, then it can be a great career choice. If some of these skills or terms don’t apply or appeal to you, then becoming a financial trader will be incredibly difficult.

2. Learn the Markets

Knowledge is power and to be a financial trader you need to know a lot. Everything from being aware of relatively obvious elements, such as trading hours and holidays, to knowing enough about the intricacies involved with pip movement, is required to ensure you make successful trades and investments.
One option to get up to speed quickly is to learn forex at Fx Pro with the information available and free demo accounts. Practice is essential once you believe you have an acceptable amount of knowledge of the market. The best part is that you won’t risk your own finances while practicing with demo accounts. Understanding all the different securities that can be traded and how other factors affect their prices should lead to more profits than losses in your future trading career.

3. Create a Trading Strategy

A trading strategy or plan is essential for every financial trader, no matter what it is that you are investing in or trading. There are many different types of trading personalities, and along with the assets or commodities being focused on, this will affect the type of plan you create. Any professional trader will tell you that without one you are setting yourself up to fail.
In order to create a personalized trading strategy, you need to decide on:
– Amount of starting capital.
– Entry and exit points.
– Maximum and minimum spends per trade (including leverage).
– Assets to trade.
– Maximum and minimum frequency of trades.
This strategy will allow you to set appropriate stop losses for your needs. Your strategy can be adapted, improved and made more complex as you become more confident.

4. Set and Review Goals

Every financial trader needs to have clear goals they are working towards to retain focus. From an overall aim to daily or weekly profit goals, being able to meet them will show how successful your trading career is going.
In order to work out realistic goals, you will need to factor in the risk and reward ratios along with achievable profit margins. These should be reviewed daily at first, before spreading out to weekly and monthly reviews, showing where targets are being met and where they need to be adapted based on your trading performance.

5. Start Small

When becoming a financial trader all on your own, even if you have plenty of starting capital, you should begin by taking small steps. Start out by making small trades and build up to put more money on the line when you begin to experience success.
Once you have amassed a decent knowledge of the markets,  created a strategy and practiced making some successful practice trades on a demo account, you should be ready to begin your career as a financial trader.

What Do Brokers and Traders Do?

While both brokers and traders deal in securities, brokers are also sales agents, who act either on their own behalf or for a securities or brokerage firm. They are responsible for obtaining and maintaining a roster of regular individual customers, also known as retail customers and/or institutional customers. Traders, on the other hand, tend to work for a large investment management firm, an exchange or a bank, and they buy and sell securities on behalf of the assets managed by that firm.

Buying and Selling

Brokers have direct contact with clients. They buy and sell securities based on those clients’ wishes. Some may even act as financial planners for their clients, shaping a retirement plan, dealing with portfolio diversification, and advising on insurance or real estate investments if their firm offers such financial and wealth management services. They deal with equities and bonds, as well as mutual funds, ETFs and other retail products as well as options for more sophisticated clients.

Traders tend to buy or sell securities based on the wishes of a portfolio manager at an investment firm. A trader may be assigned certain accounts and charged with creating an investment strategy that best suits that client. Traders work in different markets — stocks, debt, derivatives, commodities, and forex among others — and may specialize in one type of investment or asset class.

A broker often spends a great deal of time keeping clients informed of variations in stock prices. Additionally, brokers spend a fair portion of their days looking to expand their client bases. They do this by cold calling potential customers and showcasing their background and abilities, or holding public seminars on various investment topics.


Both brokers and traders look at analyst research to make recommendations to clients or portfolio managers to buy or sell securities. However, traders often do their own research and analysis, too. Despite the old-time stereotype of individual shouting offers and orders on a trading floor, most traders now spend their time on the phone or in front of computer screens, analyzing performance charts and polishing their trading strategies — since making a profit is often all in the timing.

Make no mistake, though, both brokers and traders tend to have high energy levels. They are usually proficient at multitasking and can cope with a fast-paced, high-pressure environment, especially between the hours of 9:30 a.m. and 4 p.m. Eastern Standard Time — when the markets are open.

Becoming a Wall Street Trader

Now that we’ve given you an overview, it’s time to look more specifically at what’s involved in becoming a Wall Street trader. (“Wall Street” is used in the figurative sense of the financial services industry. In the digital age, traders can and do, work from anywhere.) Though we’ll focus on the trading profession, the path to becoming a broker — the background and education — is pretty much the same. 


Traders were once more of a self-taught breed. Nowadays, a four-year college degree is a basic requirement — at least, if you want to work for a reputable financial institution or company. Most traders have degrees in math (especially accounting), finance, banking, economics or business. Not that liberal arts types can’t have successful careers as traders — any field that encourages research and analytic thinking develops useful skills. But make no mistake, number-crunching, finance, and business matters are a big part of the profession, so you need to be comfortable with them.

Some aspirants even move on to obtain an MBA where they learn about business, analysis, microeconomics and business planning. Others pursue a Master of Science in Finance. This route provides opportunities to learn about financial computing, advanced financial concepts, global investment, risk management as well as fixed income instruments such as bonds and T-bills.

Whatever the major, you should learn as much as you can about the financial markets. Make a regular habit of watching the financial channels or reading business publications like “The Wall Street Journal” or sites like this one.

Although some leap right in after college, it’s not uncommon for traders to have some other sort of work experience prior to entering the field. They may work in the finance department at a corporation. That’s even more true of brokers — given the high level of client interaction, any prior sales experience is highly valued.

Starting Out

The easiest way to get access to a Wall Street firm trading desk — the department where securities transactions take place — is to apply to an investment bank or brokerage. Begin with an entry-level position like an assistant to a stock analyst or trader and learn everything you can. Many financial firms offer internships — some paid, some not — and year-long training programs for straight-out-of-college types, especially for those on a track to get their trading license.

Requirements: Exams and Licensing

Unless you only want to trade for yourself, being a trader or a broker requires you to obtain a Financial Industry Regulatory Authority (FINRA) license to execute orders. And to get a license, you need to take some of FINRA’s tests.

To be a trader, you must pass the Securities Trader Representative Examination with a score of at least 70. This exam is colloquially known as the Series 57 exam. As of Oct. 2, 2020, the exam lasts 105 minutes and consists of 50 questions. It covers trading activity and maintaining books and records, trade reporting and clearance and settlement.1

To be a broker, you must get 72% or higher on the General Securities Representative Examination — more commonly referred to as the Series 7 exam. This is a 225-minute, 125-question exam, testing the basics of investing and investment products as well as the rules and regulations of the Securities and Exchange Commission (SEC). Many traders take this exam, too.2

In addition to the Series 7 and 57, many states require a candidate to pass the Uniform Securities Agent State Law Examination, commonly referred to as the Series 63 exam. The Series 63 exam also tests various aspects of the stock market. When an individual has a license from FINRA, they have the ability to buy or sell stocks and other securities.3

There have been some changes are set for the series tests as of October 2020. A single Securities Industry Essentials Exam (SIE) replaced overlapping portions of the 7, the 57 and other series exams. Candidates will then take an additional, smaller “top-off” exam related to the specific field they hope to enter. The reforms will also make the exam-taking process more democratic. Currently, you need to be employed or “sponsored” by a FINRA-registered company to take one of the tests. Sponsoring is often a part of financial firms’ training programs, with hiring conditional on a candidate qualifying for the license — similar to the way law firms engage graduates who study for the bar exam. The SIE removes this requirement, though you still have to be associated with a FINRA member firm to take the top-off exams.4

Onto the Desk and the Floor

You have two years after passing an exam to register with FINRA to get your license.5 Before granting it, you will need a background check — both criminal and financial — a fingerprint card and you will need to register with the SEC.6

After passing the exam(s) and attaining a license, you can request to be moved to any vacant trading desk. Here, you’ll learn how to develop trading strategies, direct trade executions and carry out trades on behalf of the investment bank or clients of the firm. At the trading desk, you also get an opportunity to study companies up close while you get a feel for the markets. You’ll gradually identify a niche for yourself, be it in futures contracts, or equities or debt instruments.

However, before starting assignments on an actual trading floor, you must be screened by the FBI. Because Wall Street traders deal with sensitive financial matters like government securities, the bureau checks to see if you have a criminal past. That’s because if any information leaked, it can lead to damaging market speculation and economic espionage.6

Career Direction

There are a variety of different career paths a stockbroker can take with some experience under the belt. Here are some options:

Financial Advisor

Advisors give financial advice to their clients and recommend financial investments and instruments to them so they can achieve their goals.

Financial Analyst

They analyze and study trends and data as they provide advisory services to others — mainly organizations.

Investment Banker

These bankers act as intermediaries between businesses and investors. Businesses raise capital by selling securities, while investors buy securities to make a profit. Investment bankers provide advisory services to businesses and help them raise the capital they need.


While the excitement of being on a trading floor or dealing with the high-stakes of the financial world may be alluring, let’s not forget an important facet of this career: the salary.

According to the U.S. Bureau of Labor Statistics (BLS), the median annual salary for securities, commodities and financial sales agents as of Sept. 1, 2020 was $62,270. The BLS does not separate traders and brokers but rather generalizes the category as noted above. The outlook for the industry is positive — job growth between 2019 and 2029 is expected to be roughly 4%, as demand for financial services, investment banking, and retirement planning grow.7

The Bottom Line

People want to become traders for various reasons. Money is a key one, but passion and fascination with finance and the movements of investment funds are key too. If you like dealing with people as well, you might prefer a broker’s life. Whichever you prefer, be prepared to thrive in a fast-paced workplace – because money never sleeps.