I'm interested in finance and I've heard about stock trading. Can someone explain what a stock trader does day-to-day and what skills I might need if I want to pursue this career?
Sure, happy to provide a bit of insight! A stock trader, also known as an equity trader, is a professional who buys and sells stocks, which represent shares in ownership of a company. They may work for a financial institution such as a bank or hedge fund, or they can trade independently as a day trader.
A typical day for a stock trader can be quite intense and fast-paced. It starts even before the stock market opens, around 7:00 am or earlier. They spend the early morning hours analyzing the financial news, market data, and any relevant geopolitical events to understand how the markets might be affected that day.
Once the market opens, a large part of their day is spent executing trades, which involves buying and selling stocks. This can be done on the behalf of clients or for the firm they work for. They have to monitor market movements despite the rapid changes in prices which can happen on a second-by-second basis. They need to be quick in making decisions considering the potential risk associated with every trade they make.
After the market closes, they again review the day's trades, analyze their decisions, figure out what worked and what didn't, and start preparing for the next day’s trading.
As far as skills go, stock trading requires solid analytical skills for interpreting market data and understanding financial reports. It also requires decisiveness and strong risk management skills since trades often need to be made quickly, sometimes with large sums of money at stake. Emotional control is also crucial, as traders need to stay composed and make rational decisions even under intense pressure. Lastly, as per the common saying goes, "The stock market is filled with individuals who know the price of everything, but the value of nothing", hence a clear understanding of value vs price is another skill which comes with time and experience.
Keep in mind while it might seem glamorous, stock trading is a high-stress job that can involve immense risk. Before deciding to pursue this career, consider gaining a well-rounded understanding of financial markets, possibly through finance or business-related coursework, internships, or mentorships.
CollegeVine’s Q&A seeks to offer informed perspectives on commonly asked admissions questions. Every answer is refined and validated by our team of admissions experts to ensure it resonates with trusted knowledge in the field.