Trading As a Career Choice-FOREX

Due to the proliferation of hedge funds and news media covering the glitzy side of Finance, trading - as a career - is now one of the most coveted positions for men and women getting out of college. Some will be lucky to get placed with a major or regional bank and others will be fortunate to land a job at an investment advisor to get their feet wet. Still, many will have to sit and wait patiently for their turn at the trading desk. This last conclusion may have been true before, but there have been many changes that make it possible for the unlucky matches to be able to have a trading career sans investment bank or hedge fund experience. Obviously,..

this path will not be as glamorous as its more recognized counterpart but in the end, it's generally the same thing.

You're trading ultimately for profit (which involves market making as well if you're sell-side institutional). So, how can one make a career out of trading if they don't have a job at an institution?

Well, that's the subject of my next series of posts.

To jump into it, I will first discuss choosing a broker. Keep in mind that this is stuff that I've learned through my experiences so it's not written in stone - it's just something of a road map that I can offer.



Choosing a Broker

This is obviously an important process because...you're going to be putting your money in their hands. One of the most important things that you need to do is to be able to protect your capital and you have to have confidence that if things go bad, you can get your hands back on your stake.

If your trading broker goes bust you may not be able to get your money so you must find out if your broker segregates your funds (basically, they don't touch it for anything else other than you parking it there to trade with them). You have to do your homework to be able to find a firm that practices this.

Obviously, for legality's sake I can't recommend anyone but just as long as you make an effort, you will be able to find a decent broker.

Ok, so now you've found your broker and you put your money in. The next day, you make a trade and wala! you've made 2,000 pips on an unexpected move from a currency pair because they just found out their country lies on top of an undiscovered bounty of oil bigger than the australian continent (I'm obviously making this up, but if you hear of such news - let me know). Ok so now you're flush with all this cash and want to take it out to treat your significant other out to a nice dinner instead of the regular outing to McDonald's.

Here's a little tip for you that I learned the hard way; when making a fund withdrawl - do a wire transfer. Forget about the credit/debit card transfer. Do a wire transfer.

The reason being is that some firms screw up the credit/debit card requests because they may process it as a credit card when in actuality, you have a debit card. This seemingly benign difference can cause you a world of hurt as there will be a delay in getting the funds to you. In the end, after you've resorted to screaming and are laying on the floor whimpering softly, the manager will simply tell you to just do a wire transfer next time.

So now, you'll have to wait until they get their account records in order before you get a chance to get your money. By then, your significant other will grumpy and you two will have to go to McDonald's - and probably eat from the dollar menu.

So there's my tip to you. Next time, I will post on equipment and all the cool stuff you should have to be a productive trader.