Most junior traders start their careers by working at investment banking or private equity firms, where they cultivate their analytical skills. This will serve them well later in their careers when they are able to draw conclusions about a company's operations simply by looking at its financial statements. Traders must be level-headed and decisive, as they will be making split-second decisions that could win or lose their client's money. A junior trader assists the trader in certain clerical duties, like tracking and reporting trades, while learning the business.
- Skill level:
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Complete at least a bachelor's degree in accounting from an accredited college or university. More ambitious students also will pursue an MBA from a top-tier university. You will be introduced to concepts such as depreciation schedules and matching principle. Furthermore, do corporate finance coursework. Exceptional grades and professor recommendations can help you land a coveted summer internship at a major firm.
Gain experience by working in industries that specialise in financial statement analysis, such as strategic planning, corporate finance or forecast and planning. Working in any capacity under a senior trader will help you develop a better understanding of trends and decisions, and their effects on various markets around the world. Become adept at reading financial statements, diagnosing problems and opportunities, and developing financial forecasts. You also gain experience through a summer internship at an investment banking or private equity firm. Third-party organisations like AlumniAthlete Network and Management Leadership for Tomorrow also run internship programs.
Invest your own money through an online brokerage system, and manage your personal portfolio. It generally costs several hundred dollars through these services. This experience will be invaluable, particularly if you're able to articulate why and how you chose your stock at a future job interview.
It is fairly easy to get started.
Pass the Series 7 and Series 63 licensing exams, which are administered by the National Association of Securities Dealers (NASD). A candidate can qualify for this by having experience in the industry and a solid understanding of its driving principles, regardless of job position. Some states and firms will not require candidates to take the latter test. These tests can be taken once you have been hired by an NASD member firm. You also will have to undergo fingerprinting, a background check and submit a U-4 application, which can be downloaded from the Financial Industry Regulatory Authority (FINRA) website. Upon completing this process, you can earn your designation as a junior trader.
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