Trader - what is it, and how to become?
What is it - a trader? More precisely - who is it? The very name of the profession comes from the English to trade - "trade". All people, in one way or another connected with trade, and not only can feel free to call themselves traders.
The history of the emergence of trading
The first mentions about financial trading appeared in the XVI century. Known and the first stock exchange - Antwerp and Lyon. As you know, demand creates supply. Then the state needed a platform for the sale of bonds, and producers of goods needed financing for production. Thus, by the end of the 17th century, the notion of a trader was strengthened in connection with the formation of the largest to date London Stock Exchange. Companies trading on the stock exchange began to develop, and trading in shares or stakes in large companies began to acquire increasing popularity.
In addition to the commodity and stock markets, there is a foreign exchange market. But, the history of its development began in 1976, when a floating exchange rate was established for the Jamaican system, which replaced the Bretton Woods, based on the gold supply of the currency.To the present, we live in the Jamaican system, that is, the currency is a separate commodity that is not tied to the gold reserve of the country.
Before the beginning of the 90s of the last century, in order to have the right to trade on the currency exchange, the trader had to have a capital of at least 100 thousand US dollars (the price of one trading lot). Therefore, small traders and speculators had no access to the stock exchange, forming a shadow market. In order to legitimize this process and get profit from turnover, dealing centers were established in the UK in the early 1980s, which accepted private contributions and paid them a margin on transactions.
Only in 1986, after seeing the result of the activities of the dealing companies, did the central banks in many countries of the world officially recognize this type of commerce, thereby opening ordinary individuals to access to trade in financial markets. But trading on the stock exchange is closed to small traders, since the fee remained unchanged ($ 100,000), and the trader must pay for the contract on the basis of which he has the right to trade.
So, the trader - what is it? It would be more correct to say - who is it? Historical insight gave us some notion of the specifics of the activities of the profession in question.
The history of stock trading in Russia
The exchanges themselves existed in our country from the beginning of the 18th century until the beginning of 1930. However, such a profession as a trader in Russia, of course, was not. Then the exchange closed. Again, trading began with the collapse of the USSR and the beginning of perestroika in 1991. But, again, as well as abroad, this market was closed for small investors. Over-the-counter trading did not exist.
Access of small investors to the market began in connection with the opening of the office of TeleTrade in Moscow in 1994. Gradually, other foreign companies began to enter the Russian market, and domestic companies began to open up. But for individuals, the market was still unavailable. And only from the beginning of the 2000s, with the development of the Internet and the emergence of various protected trading platforms, the rapid flourishing of the exchange market began in Russia. Trader's profession has become popular.
Since the beginning of the 2000s, trading training programs have been improved, new ones have been developed, taking into account amendments to the user. Thus, in the 21st century, anyone could remotely master the profession of a trader.
In times of crisis and in connection with a drop in access to the opportunity to receive additional income from ordinary citizens, interest in activities on financial Internet platforms sharply increases.Only in the company "Forex" until 2015, more than 450 thousand people have become active traders from among individuals.
How to become a trader?
Many people do not take trading seriously, because they do not see offices and, as they say, they cannot touch them. Today, many ask the trader - what is it? More precisely, what is this activity? For the profession in question you need training. At first glance it may seem that it is very difficult and incomprehensible. But, having studied the basic principles, one can easily understand how financial markets, banks and other institutions of the financial sector work. And if you no longer like the profession of a trader? In the future, you will be able to keep your home accounting and manage your finances correctly, earning from it.
Anyone can become a trader. But for this you need to understand that you will need constant training, you will always need to be “on the crest of a wave”, communicate with very experienced traders, take additional training courses. In training centers there is the possibility of practicing a trader with experienced traders.
Do you want to work as a trader? This activity involves composure and iron restraint.Public or imposed opinion is inappropriate here, you only have to trust yourself. With a fairly good development, the most experienced trader can earn money on training beginners.
Everyone has a calculation on the success of their profession. But this is a market and even experienced traders have extremely bad trading days. If you succeed in securing a permanent positive result, while respecting both the general rules of trading and your strategy, then you are a real trader on the right path and no market fluctuations can break you.
Trader inherent excitement
If a person works on the exchange and lives only on earnings from trade, he is considered a professional trader. All other participants are amateurs or people who want extra income. For many, trading in the foreign exchange market is a hobby. These people are important not so much profit as the process itself and the ability to constantly learn. It is those for whom this type of activity is a hobby, subsequently writing very interesting, informative articles and books on the market topic.
The best trader is someone who has a certain enthusiasm, even excitement.He knows that it is on the stock exchange that he can very quickly earn good money. To start trading, you need to invest some money (usually the amount is about $ 500).
Types of traders
All traders on the stock exchange are divided according to various criteria: trading tools, aggressive strategies, etc. Which path to choose in order to become the best trader?
The most important classification is according to the time of trading periods. Here you should not be confused with time in a physical sense. A trading financial period is the time during which a trader trades on a specific account. At the end of the period, this account is closed. Consider this in detail.
- Type of trader number 1. What is it - a trader – scalper? These managers work with the shortest timeframes - from 1 to 5 minutes. Here is the highest level of stressful situations. This happens due to the fact that it is very difficult to make a deep analysis of the situation during this time. Here, one might say, traders work on intuition. But scalpers earn the most, so their number is steadily increasing.
- View number 2. Day trader. In this case, the trading account is opened within one business day.In this way of trading, traders work using different financial instruments. Almost the entire stock market works on the principle of a full working day, since if you leave the account open for the night, the shares may fall and the account will become a loss to the merchant. Transactions in stock markets are usually closed within an hour in order to have time to do the analysis, discarding market noise.
- № 3. Medium-term trader. Thus, well-trained professionals work, the account remains open for several days. But, they themselves decide when to enter the market, when to get out of it, using trading periods from 1 to 4 hours. With this type of trading, market noise is almost invisible, and a deep, sound analysis of the market can be made.
- № 4. Long-term trader. With this method, positions are not closed for several weeks or even months. Transactions are rarely closed. When analyzing the market, only fundamental techniques are used. Long-term traders do not close positions for a long time. There are also binary traders engaged in activities in the field of similar options.
In the analysis it should be borne in mind that with an increase in the trading period, the time required for analyzing the market decreases. If the transaction is open for a long time, then the trader studies charts only on weekends, and on weekdays - the transactions are not monitored.
The advantages of working as a trader
Immediately I must say that it will be very hard to learn and become a good trader to the professional level. It is necessary to understand for the sake of what to spend so much energy.
- Independence. Here the trader is his own master and he decides when to start trading. There are no directors and chiefs. All you need is a computer with a stable Internet. Trading is designed for very active people who are constantly moving. Also for closed people who do not like companies, this is an excellent type of earnings. Nobody needs to report, you can independently study the materials and develop your own trading strategy.
- You can work and people with no education or with a specialty from other areas. Of course, most traders have special financial or economic education. But still it is worth considering a large share of those who work in completely different, non-economic and financial areas.Many traders are self-taught, and it is they who have big profits in the market. Some did not even attend special courses for traders, but took everything from public sources themselves.
- Income has no limits. It all depends on the chosen trading strategy and, of course, the size of the trade deposit. Increasing the trading account, multiply the earning potential with a correctly chosen strategy and fixed positive dynamics.
With high risks many times increase in income. However, you should not choose an aggressive strategy, having little experience in trading on the stock exchange, because the probability of losing all the money invested is high. All of the above benefits attract and will attract a huge number of beginners.
However, many people quickly spend their deposit without even recording a positive result. There is a huge disadvantage of this profession - unstable income. Professionals with extensive experience can also lose in profit for a long time.
A trader on the exchange is like a perpetual motion machine. In this work there is no weakness, laziness, you always need to be in good shape.Many people think that making big money with minimum investment can be easy and very fast, but it is not. The trader must be constantly in the market, be aware of all the fluctuations and changes and at the same time have time to do self-education, work constantly on themselves and their emotions. A successful trader is a bit of a predictor, a creative person who sees which way the stock market will swing. You need to be constantly alert.
Not every person can be in constant psychological stress. Fighting emotions is the main goal of a trader, otherwise you can pay not only with money, but also with your health. This can be avoided by connecting to a mechanical trading system.
Working with the help of a mechanical trading system, you save yourself from two ills of any trader - fear and greed. In this system, the human factor is completely excluded. The design in the settings will always close the losing trade, not expecting that the market is about to grow.
The developers of this method tested it in a relaxed atmosphere, making it possible to consider all the options for market behavior and, accordingly, reactions to all possible developments of the situation.The trader may interfere with the system if he considers it necessary to do so.
On the Internet, in various trading companies one can become familiar with mechanical trading systems, as well as find a variety of trading ideas and different strategies for working in the market.
Different approaches to trade
Each trader has his own strategy and his own trading plan. The diary of a trader is also important - a necessary tool for achieving success in your work. Most trades just for the day, making a few dozen transactions. But, there are those who close a couple of deals a year; these are mainly investors.
But all participants in the stock market can be divided into four independent groups, depending on the chosen method of analyzing the situation in the stock market.
- Technical analysis. This includes those traders who use technical indicators, methods of neural network, artificial intelligence, building shapes on price charts. This is the largest group in terms of the number of people it includes. A lot of literature on technical analysis is in the public domain. Absolutely anyone can learn this.
- Fundamental analysis.It is based on predicting the situation with the behavior of prices in the stock market depending on the political component in the world, various events of any nature. This could include any news, reports of large companies, natural phenomena, disasters. All of this is analyzed and a conclusion is made about the approximate prices and the growth or decline of the market as a whole. Most novice traders lose money very quickly and leave the market, since not everyone can trade this way.
- Use your own methods of analysis. This group of traders includes those participants who have developed and are trying to put into practice their own methods of analysis and strategy. And also those who consider the stock market as a casino, using the theory of probability and relying on intuition. With these methods, orders are very cleverly created and open positions are accompanied. Usually the casino principle is used here - double the bet with each loss, hoping to win sometime. Mechanical trading systems are often used to track market behavior.
Here is the most interesting group of traders.Here, people trade, relying solely on their own intuition. Strangely enough, this includes people with a long history of trading who need only one eye to look at the charts in order to know exactly how the market will behave and when it is necessary to close the deal so that it brings profit. There are very few such traders; they are based only on their experience in daily trading. At first glance, it may seem that they do not analyze anything at all. But it is not.
They have trained their brain and memory so much that, having only looked at the graphics, they automatically automatically, faster than any machine, think everything is calculated. Such people are said to “feel the market”. Of course, this whole division of trade participants into groups is very conditional. Most traders in the work use several methods of analysis. To protect against losses from experienced traders, there are several trading systems. They allow you to cover the damage on one of the systems.
Exchange trading in the stock market is fascinating. It allows you to develop individually, to obtain financial knowledge, which make it possible to properly manage their savings.Becoming a trader in the Russian Federation is quite simple, and this can be done by any person who has a computer and stable Internet access, as we discussed above. Knowledge can be obtained free of charge from any available sources. If trading in the first time is scary, then you can connect to a mechanical trading system.