TRADERS

trader is a person who exercises the profession of trading, that is to say, the purchase and sale of financial instruments in the stock markets, such as stocks, bonds, commodities, financial derivatives , among others, whether as intermediary agent, speculator, arbitrage or coverage operator. A trader can work independently, in an investment fund, in a bank or in another financial institution.

They are classified as scalpers, daytraders and swingtraders depending on the duration of their operations, whether intraday, intra-weekly or intra-monthly. The opposite of a trader is an investor, who operates by nature in the long term.

 

Training and remuneration

A trader usually has a background in economics (Economics, Administration, Accounting) with knowledge not only in finance, but also in mathematics and statistics.

In the banks and funds, the remunerations are usually high compared to other professions, for the “bonuses” that they charge at the end of the year according to what they have earned for the entity. The bonus can be several times the fixed salary. The race is usually quite short (few people are over 40), but with the crisis of 2008-2012, this fact has a tendency to change. One of the justifications for high salaries and bonuses is the stress generated by the market, and the responsibility due to the amount of money that is being managed sometimes by a single person (investments of tens of millions).

A trader operates in the markets in the short term and aspires to have a quick return but the search for money through short-term activities in financial markets is contrary to religious morals.

 

Strategies trader

A trader uses one or several combinations of strategies, basing his decisions on several analyzes. These might be:

  • Technical analysis: The trader uses graph analysis to try to predict future prices and trend curves.
  • Fundamental analysis: The accounting information of the company is used to evaluate the trend of its price.
  • Macroeconomic analysis: Variations in the economy are taken into account.
  • Quantitative analysis:
  •  Statistics are used to predict movements in prices.

 

Psychology of the trader

The traders must have a level of cold mind and rationality very developed so as not to fall into temptations or market panics. A good trader should not be carried away by emotional feelings in the market, as this can mean big losses. It is one of the most difficult parts to control in a trader, and yet it is one of the most important skills for a trader to be successful.