To develop a career in any line of business, you need a combination of three things – fondness for subject, qualifications and mostly importantly aptitude for the topic. If these three develop a right combination then there is no chance that you can fail in any career line you choose. Thus, even if you want to start a career in financial sector – you need to have a right kind of combination for your success. It includes liking for numbers, price charts, trend analysis or even responsive attitude to react at the right time. Let’s say you want to grow big in stock market by becoming a trader. Is it possible? How do you succeed in becoming a successful stock market trader? We would discuss the likelihood of ways and means to make it big here.
How should I start my career in the stock trader?
The right path to start your career as a stock market trader is to start working with an established brokerage firm, fund house or with some banks internal fund management team or retirement fund. It will give you the right kind of high exposure in relation to huge volumes trading and gives you right training for buying at the right price. It helps you make your initial day mistakes giving you best training for your future growth. Also, if you want to grow big you should plan ahead to start your own trading desk.
What are the qualifications to start career as a stock trader?
To begin your career, if you have always preferred the financial services domain, then there are high chances that you don’t need to wait any longer then completing your 12th standard or junior college as it is technically known in India. However if you are planning to join any brokerage firm, you need to complete basic Bachelors degree. Followed by this, you need to clear a simple test conducted by NISM to get license for your stock market trading number. If you desire to start your own independent practice as a direct member with the exchange there are additional requirements of starting up the practice for the total net worth, deposit and team. The details of the same are made at the NSE website. Beyond the educational qualifications, it is necessary to have natural flair for decision making and good soft skills to communicate your ideas with the clients.
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What are the duties and responsibilities of a stock trader?
The basic role of any stock trader is to buy-sell securities for his/her clients. He/She is involved in day to day monitoring of the client portfolio. Also beyond the online stock trading role, an advisor needs to update the client on market situations and the required changes in their personal portfolio. Although, the trader does not necessarily need to have qualified analysis skill sets but he/she should be able to help the client in studying, analysing and even share the stock research details with the clients. It is duty of the trader to act on behalf of the client’s well being and make all decisions to protect the client’s capital. Hence, it is necessary to see that he/she does not wrongfully use the trading permission given to him/her by the clients.
How can you grow your stock trading business?
The best way to attract new customers to your online stock trading business is to give them lucrative deals on brokererage charges. Take more seminars, invite people over high tea and snacks discuss the benefits of online stock trading. Try to empanel with some local clubs or trusts to give concessional brokerage charges to the members. Also, if possible give free demat account to them. If required use your alma mater contacts or professional platforms to track new prospects. Send regular mailers regarding the stock picks recommended for short and medium term. Also, share research reports and let investors have a personal chat platform with your analyst to understand his rating logic. Over time, people trust results over the big talks.
What is the average earning scale in stock trading?
The career in stock market can start with a few hundreds and even starts to grow up to few lakhs in short span of 5-6 years. It all depends on how much effort you spend in the market understanding. The amounts are varying if you just want to stay as an employee or plunge forward as an entrepreneur. The risks may be higher on setting up your own practise but the earnings are also high. The professional degrees can’t really help you to get the high earnings after a certain introductory breakthrough. The client satisfaction with your online stock trading skills and only profits does the speaking then. Thus, it is only the interpersonal and analytical skills that can get you forward.
What are the challenges in stock trading role?
An individual has to work in hard core pressure environment delay can cause a big price change. In the cut throat competitive stock market, if you want to grow you need to make your presence felt maximum in all places. Thus, a trader needs to have good connections with his clients. He needs to market the stock recommendations to his clients. The trade volumes depend on his ability to convert the stock ideas into business. The profession can be on a demanding side and clients often may call to avail reasons for any short term loss or lower than expected profits. They need to be handled tactically and with utmost calm. It is also necessary to be thoroughly equipped with trading rules. Any small mistake can ruin your entire game plan. A small time investors’ trusts his money with the brokerage and if he faces any loss with his capital, he loses his trust. So you have to be careful with the investment corpus. Also, the knowledge upgrading is must for staying ahead in the market. You need to start your day early in the morning and stay ahead of the rest. You have to a watch on all the news relating to your portfolio. Also, you have to be active on the various media groups to get the first mover advantage.
Word of caution before you plunge further:
- Be alert for news and develop maximum network within the trader communities where all the insider news is floating.
- Stock trading market comprises of news, rumours and hearsays. It is necessary to distinguish between the three before taking any decision.
- Compliance to SEBI regulations is necessary if you want to continue surviving in the market. In case of any law violation, there are chances that you could loose your license.
- Client Servicing is huge in this role. Every trade needs permission from client and details after completion of trade need to be conveyed to the client. If the client is dissatisfied with the trade ideas promoted by you and wants to shift to any other broker.
- It is necessary to follow ethical practice to build huge client base in long run. If you don’t focus on this kind of business, it might be difficult to survive after few years.
- Be patient. It is necessary to build a healthy practise as a trader. Acquiring new clients, retaining them as well as earning profits needs to be an ongoing activity. If you miss on any one front you could fall flat on face.
- Failure is part of any career. Taking is as a learning step and go further without stopping in between. Stock trading is not as simple as F1 for buy and F2 for sell. There are many unsaid rules for mastering the art of trading.
So, keep aside all your inhibitions and make your first move today to gain the high exposure of trading. Do a strong research about your market competition and just make your move ahead. The wait time to make substantial profits might be long if you discontinue your research in mid way. However, if you keep on moving you are sure to reach the pinnacle. As Warren Buffett says it, “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”