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If you want to become a trader on an independent basis, you’ll require capital. Proprietary or ‘prop’ trading generally means less freedom but also significant potential advantages, such as support, training and absence of personal financial risk. Prop traders’ attitude to risk should be the same as that of independent traders, as if the trading capital were their own. Routes into the business vary, but training and talent development provides invaluable assistance. Later in this article you’ll find details of OSTC’s tailored programmes. To address the title question - “how do I become a trader?” – we’ll break the process down into 6 key steps:


Preparing to become a trader

Stepping into trading requires a level of confidence and awareness. Preparation is an essential step in the process. Ensure you have the uncompromisable skills within trading and understand all the considerations you need to make before beginning. There are many different ways of approaching the role, and you need to determine what is right for you. Different roles, different markets and different asset classes all come with different risk profiles. Finding the right combination for you is key.

There are certain occupational hazards associated with trading; you need to be prepared for these setbacks.

All traders will make losses, it is inevitable. No-one can be profitable 100% of the time and you need to be psychologically prepared to deal with these setbacks. Different people have different tolerances to setbacks, with different coping mechanisms for the daily ups and downs of trading.  

There are many different ways of approaching the role, and you need to determine what is right for you. Different roles, different markets and different asset classes all come with different risk profiles. Finding the right combination for you is key.

You can only start to make this judgement when you know more about the various markets and the trading roles within them. The next section focuses upon this and the question – “What type of trader do you want to be?”

 

THE BASICS: WHAT TYPE OF TRADER DO YOU WANT TO BE

We have already considered the key distinction between independent and professional traders. Other important distinctions relate to trading time-frames, chosen instruments, asset-classes and markets.  

Independent traders tend to be shorter-term traders. This short-term “scalping” is often intra-day, hence such traders are known as “day-traders”. Open positions are often flattened at the end of each trading day, so risk is reduced, and capital not required overnight. Day-traders are some of the most active traders, diving in and out the market on multiple occasions, often for the briefest of durations. The ability to take quick, decisive action is important.

Becoming a professional trader, a proprietary trader for a bank or institution opens a wider range of possibilities. It’s often the case that independent traders progress to working for a company when the opportunity becomes available.  

Professional traders may be granted access to a wide range of trading platforms, instruments, exchanges and asset classes. 

 

EXPLORING THE ASSET CLASSES

Bank of trading screens

Asset classes are broad groupings of commodities or assets that are either inter-related or share similar characteristics. Key asset classes include:

  • Equities – stocks and shares in individual companies that trade on Stock Exchanges such as the LSE and NYSE. Usually grouped together with – 
  • Indices – stock indexes such as the FTSE 100 and S&P 500
  • STIRS – Short Term Interest Rates. Some of the biggest contracts in the world such as Euribor and Eurodollar, usually grouped into –
  • Fixed Income – bonds, both government (e.g. UK Gilts and US T-Bonds) and corporate
  • FX – Foreign Exchange or “Forex”, currency pairs such as Sterling (GBP) vs US Dollars (USD)
  • Energy – Crude Oil and distillates (“cracks”), Gas, Coal, etc. This group also incorporates the increasingly significant category of Emissions
  • Commodities, usually sub-divided into –
    • Agricultural commodities like grains, fibres and “softs”
    • Metals – precious, semi-precious and ferrous
  • Alternatives – contracts such as crypto-currencies that don’t fit the traditionally accepted classes

Some of these asset classes (e.g. Indices) trade predominantly on exchanges and exchange platforms while others (such as FX) trade predominantly Over-The-Counter (OTC) – away from recognized exchanges.

 

A TYPICAL DAY IN THE LIFE OF TRADER

You may have a rough idea of what it means to be a trader but it’s worth examining this in greater detail. While there’s no typical trader, there are certain activities in common to most, if not all, traders.

Trader looking at bank of screens

Traders are always on the look-out for significant data and information, regardless of source. Even during down-time, traders will identify useful information from the media. This information is thrown into the mix, supporting the trader’s decisions in the following days and weeks.

Trading days can begin at any time because global markets are open 24 hours and different geographical markets and exchanges are busiest at different times.

“A TRADER IN THE LONDON MARKETS MIGHT TYPICALLY START BETWEEN 7-8AM. SOME WILL START EARLIER OR LATER. IT’S NOT SIMPLY A QUESTION OF PUTTING IN THE HOURS BUT GIVING YOURSELF TIME TO PREPARE, BOTH PHYSICALLY AND MENTALLY.”

Traders specialising in other international markets may start earlier or later. Traders in Far Eastern markets like China, Singapore or Japan might trade through the small-hours London-time, while those focusing on US markets will typically start and finish later. At OSTC, we have traders located in offices around the globe, typically trading within the time-frame of 9am-9pm London-time.

One of the most important things is determining your most productive hours of work. Through our OSTC biometric app, you can see a daily indicator of your para-sympathetic balance, helping you decide when you’re at your most effective.

Preparation time before the markets open is important. Key tasks include checking trades and positions (reconciliation), being aware of the day’s data releases and market information, checking mails and communications from other parts of the business (risk, compliance, etc.) and deciding trading strategy for the forthcoming session.

Once the trading session opens you need to remain focused for the duration of the session. It’s impossible to concentrate intensely for hours upon end so you’ll need to build strategies that allow you to relax periodically before re-focusing. Our Biometric Analytics let you know when you’re at “full power” and when you should rest.

Mobile with app screen

Critical periods during the day are the opening session, when prices generally fluctuate until they find an equilibrium level, the periods around any data or information releases (such as economic statistics, Central Bank meetings, etc.), the US open (early afternoon UK time) and the close, when market participants look to balance their overnight positions.

Finally, after the close, you need to check the day’s trades and consequent positions, calculate your daily profit or loss and, importantly, assess the risk associated with your open positions. It’s then worth considering your plan for the following day, the trading strategies you hope to employ and how you’ll react to different scenarios. Good traders are always well prepared.

Self-Assessment

Deciding you want to trade is not enough. You need to be honest about your strengths and weaknesses and plan to achieve your aim. With such a high-risk profession, we encourage aspiring traders to thoroughly assess their readiness to enter this demanding industry. This involves analysing your strengths, characteristics and numerical skills. It’s also important to know what you want to achieve. Everyone’s different, but we share some practical steps you can take to improve your daily practice.

Deciding that you want to trade is not enough. You need to be honest about your strengths and weaknesses and plan to achieve your aim.

You’ll need to consider;

  • Your characteristics: Are you a suitable candidate for trading? Do you have the discipline, mental strength and stamina to succeed in such a competitive arena? Can you learn from your mistakes and improve? Are you a decision maker? You need to honestly answer these questions. No trader is the “complete package” – the key is choosing the right area of trading for your talents.
  • Personality tests: Can be useful in identifying strengths and weaknesses to find your optimal role.
  • Understand typical trading hours: Working within a company with access to a range of markets can provide flexibility. Independent traders can choose whichever markets and hours best suit their circumstances.
  • Research: Be aware of many different trading possibilities. Read the financial press, visit market-centric websites and speak to as many traders as possible.
  • Your numerical ability: Most calculations are undertaken by computers, but an intuitive understanding of the underlying mathematics is useful. It can help you identify market patterns and understand relationships that might otherwise go un-noticed.
  • Characteristics and psychology: How do you react to pressure, making mistakes and losing money? Can you cope with periods of inactivity and stay focused when the markets are quiet?
  • An equity assessment: Independent traders need trading capital before starting. How much can you raise? How much are you prepared to lose?

Person looking at a bank of trading screens

 

IMPROVING AS A TRADER

Improving as a trader is a different process for everyone. However, there are some practical steps you can take to improve your daily practice. These include;

  • Staying informed about the markets
  • Practice (or “dummy”) trading
  • Expanding your knowledge through training and education
  • Finding a trading mentor

It’s important to understand what you want to achieve. Independent traders need to find their own resources to develop their ability and confidence. At OSTC we partner with students to help them achieve their objectives through tailored trading programmes.

Research trading

Trading is simply the act of buying and selling, but becoming a successful trader involves much more. All traders, from complete newcomers to experienced traders, need to grow their knowledge – a process of continuous refinement and improvement, which is an important step in discovering what is best for you. You’ll also need to learn, understand and implement techniques and strategies. It will grow your chances of succeeding with a greater understanding of the industry and all it involves.

Expanding your knowledge of various trading strategies and techniques is an important step in discovering what is best for you.

All traders, from complete newcomers to experienced traders, can grow their knowledge – a process of continuous refinement and improvement. Here are some key elements and techniques indispensable to any trader:

 

TRADING STRATEGIES

Trading is simply the act of buying and selling, but becoming a successful trader involves much more. You’ll need to learn, understand and implement the following techniques and strategies:

Risk management: How much are you willing to risk each day? You need to develop a trading strategy that minimizes risk and maximises potential profit. Set a limit on what you’re prepared to lose and adhere to it religiously.

Buy low and sell high: This fundamental trading aim sounds easy but is tough to achieve in practice – accurate market analysis and timing is critical. Technical Analysis (TA) can help.

Set aside plenty of time: Trading requires time and attention. You can’t hope to become a professional with limited time. While you won’t trade every second of the day, different markets need to be monitored in real-time, along with relevant data and information.

Smaller is better at the start: Trading in professional markets can be intimidating. Most neo-traders start relatively small in size, growing their positions as they gain familiarity with the markets.

Keep up to date: Expand your knowledge continually by keeping up-to-date with the latest market news and anything that could affect the outcome of your trades.

Stick to the plan: Traders are successful because they stick to effective plans. Don’t allow your emotions or the thrill of chasing profits to derail you from your strategy.

Trading systems: Automated trading, also known as algorithmic trading, is increasingly popular in modern markets. This means developing a strategy, then allowing trading software to implement it. With AI (Artificial Intelligence) being brought increasingly to bear on markets, smart trading systems can learn from and adapt to changing market conditions.

Market analysis: Clear analysis of markets which you trade is important. However, to be an effective trader you also need to consider other related markets. For example, one of the most important factors affecting commodity prices is the strength or weakness of the US Dollar. As a commodity trader you also need to be monitoring key Forex markets.

 

Charts on screen

FUNDAMENTAL ANALYSIS & TECHNICAL ANALYSIS

Traders employ two basic forms of market analysis; Fundamental and Technical Analysis.

Fundamental Analysis means studying real-world factors that impact the market prices of assets or commodities. For example, commodity traders need to analyse crop reports, weather, global demand, international trade policy, etc. They also need to be aware of developments in related markets like Forex and shipping.

Technical Analysis (TA) is the study of charts. Most professional traders employ TA, with many relying purely upon charts for their information. TA is a huge subject that ranges from simple concepts to highly complex studies such as mathematical indicators – RSI, Stochastics, Bollinger Bands and so on.  

Junior professional traders should develop their knowledge of both the fundamentals and the technical. Don’t take too much on at once but build your knowledge steadily.

 

DAILY TRADING PRACTICES

As a new trader developing your skills, your approach to trading days can be broken into 6 stages:

  • Self-analysis
  • Mental rehearsal
  • Market analysis 
  • Putting the plan into action
  • Monitoring trades/positions
  •  Realising profit or loss

Everything starts with you. Are you ready to trade? Only you can answer that question, but honesty is key. Keep a record of your mental state and see how that impacts your subsequent trading. The OSTC biometric app also offers valuable insight.

App interface

Next is mental rehearsal. Prepare yourself for the tasks ahead – remind yourself of the need to stay calm, remain objective and stick to your plan. Mental rehearsal increases the chance of adhering to these principles.

Now put your plan into action. Hopefully you have developed a relatively low-risk idea, the result of detailed market analysis – the product of market data and careful thought.

It’s time to enter the market. Deciding the right time to enter a trade is an essential skill for any trader – many professionals use technical levels to enter and exit the market.

Trades need monitoring throughout the trading day. Positions should be carefully watched and thoughtfully appraised as market conditions develop. Day-traders may enter and exit multiple trades through the session – be careful not to run too many positions simultaneously as it can confuse the overall picture – particularly for junior traders.

Trader looking at screen

Carefully monitor your open positions. Day traders may have taken several positions throughout the day and will need to monitor them all simultaneously.

The final stage is realising a profit or loss. TA can help to decide exit points for trades – but there’s one golden rule observed by all professionals: “Run profits and cut losses”.

Get qualified

Learning how to trade involves acquiring the right knowledge and experience. Gaining necessary qualifications is helpful for furthering a career in the trading market. You can become qualified through appropriate certification and trading support, such as our ZISHI trading courses. We aim to advance our students and progress their trading careers, developing the skills and mindset to make them stand out in a competitive marketplace. Unlike a degree, our programmes provide flexible study options.

Learning how to trade involves acquiring the right knowledge and experience. Our trading courses let you obtain the right trading qualifications and certificates before entering a trading organisation. We aim to advance our students and progress their trading careers, developing the skills and mindset that makes them stand out in a competitive marketplace.

 

WHAT QUALIFICATIONS DO YOU NEED TO BECOME A PROFESSIONAL TRADER?

For those hoping to become corporate traders, academic qualifications in a relevant discipline (e.g. Finance or Economics) are useful. Previous knowledge and experience in business administration and corporate management is also beneficial but not essential.

Formal academic qualifications are less significant for independent traders, though market-focused course content is still helpful.

 

DO YOU NEED A DEGREE TO BECOME A TRADER?

A (relevant) degree is useful but not essential to become a trader. Non-graduates have plenty of options including learning independently to obtain a professional qualification.

At OSTC, we teach everything you need to know. Unlike a degree, our programmes provide flexible study options. Courses can last between 3 days and 5 weeks and are an affordable means of achieving qualification. We also recruit the best talent for our network using ZISHI Adaptive, leveraging the potential in advanced technologies and tools.

Woman pointing at screen

The highest Level 5 Advanced Diploma Financial Trading course gives non-graduates the equivalent of a Higher National Diploma holding 32 RQF qualification credits within 4 weeks. It provides the knowledge and experience needed to successfully initiate a financial career.

 

OSTC TRADING COURSES

OSTC provides a range of trading courses to accommodate potential traders’ needs. These training programmes ensure you fully engage with the markets. 

 

LEVEL 2 CERTIFICATE IN FINANCIAL SERVICES: 3 days

This 100% portfolio-based introductory course offers a foundation level of knowledge for operations in financial markets and an understanding of associated risk. This Level 2 qualification consists of 4 modules and is the perfect steppingstone for securing a junior role within the financial sector.

LEVEL 3 DIPLOMA IN FINANCIAL TRADING: 3 weeks 

Gain an industry recognised level of knowledge, enabling you to pursue a variety of job roles within the finance industry. During the course, you will develop a range of relevant skills while completing mandatory tasks to demonstrate your understanding of key principles. 

LEVEL 5 ADVANCED DIPLOMA IN FINANCIAL TRADING: 4 weeks (can be split weeks)

To ensure the highest level of relevancy and employability, the Level 5 course is recommended for those looking to acquire a professional level of competence for trading in financial markets. It consists of three modules covering market operations, analysis and trading techniques. Besides having an interest in trading, no formal entry requirements are required, although you must be at least 16.

LEVEL 5 ADVANCED DIPLOMA IN OPTIONS TRADING: 5 weeks (can be split weeks)

This gold standard educational course takes a deep dive into trading and markets, incorporating a range of subjects including trading strategy, option contracts and trade management. It’s a favoured option for students looking to fast track their entry into the finance industry. 

Get in contact for more information.

 

Profile portrait of trader

HOW WILL TRAINING HELP ME IN MY CAREER?

Alongside trading, there are many roles within the finance industry which our training can help. These include:

  • Trader
  • Trader support
  • Portfolio manager
  • Risk manager
  • Financial analyst
  • Market operations
  • Compliance officer

…and many more. 

 

HOW MUCH DOES IT COST TO TRAIN AT OSTC?

The cost of our courses varies between £300 and £4,250 (+VAT). Get in touch for further queries and to apply.

Strategise & Practice

An important stage on the journey to becoming a trader is putting your passion for trading markets, resilient mindset and ability to practice. You may have acquired the skills and qualifications to trade but lack experience. From paper trading and demo accounts to online simulators and games, new traders have various opportunities to practice trading. It lets you test strategies in a range of market conditions without financial risk. You can also do it by utilising other performance technology.

You may have acquired the skills and qualifications to trade but lack experience or practice.

 

HOW DO NEWCOMERS PRACTICE TRADING?

From paper trading and demo accounts to online simulators and games, new traders have various opportunities to practice trading before committing real capital.

 

PAPER TRADING

Paper trading means writing down trades rather than actually executing them. The obvious advantage is you can’t lose any real money – just paper losses – but you must understand that paper trading is very different from the real thing. It’s far easier to make unemotional decisions when there’s no monetary risk. Nonetheless, paper trading is a useful exercise for anyone learning to trade.

Person writing

 

DEMO ACCOUNTS

Demonstration or “demo” accounts let you place trades into the market as if they were real. You do everything in the same way as if you really were trading – but without the financial risk.

Often the functionality and appearance of these systems is identical to the “real thing”, allowing neo-traders to become comfortable with systems before committing fully.

Some of these systems replicate the market in real-time while others use “canned” or historical price data.

Trading games and competitions are sometimes staged in this environment, allowing neo-traders to compete, adding background colour and “gamifying” the trading experience.

 

HOW DOES THIS HELP WITHIN THE RESEARCH PROCESS?

Practicing in any of the above forms lets you test your trading strategies in a range of market conditions without financial risk. They also allow you to test your discipline but beware – dealing with real problems is far more challenging.

Woman looking at screen

Get Experience

Trading is a practical undertaking. When you start trading, you need to learn to trade through hands-on experience. Our guide will also outline the most appropriate ways to gain experience in trading to support the trajectory of your trading career. Through the internship and trading training opportunities we offer, you can gain this much-needed experience and improve your chances of becoming a successful trader. At OSTC, our career paths offer opportunities for progression at all levels.

Trading is a practical undertaking. When you start trading, you need to learn to trade through hands-on experience. Through the internship and trading training opportunities we offer, you can gain this much-needed experience and improve your chances of becoming a successful trader.

 

APPLY FOR A JUNIOR TRADER ROLE

The best way to gain experience is to start work as a junior trader. We welcome aspiring traders as well as those who want to improve their capabilities to trade independently. With our targeted training, specialist technologies and university accredited courses, OSTC has everything required for those wanting to improve their trading potential.

Entry requirements: OSTC welcomes candidates with an interest in trading. Whether you attended university or not, we only require the right attitude and a desire to succeed. ZISHI Adaptive utilises information technology and artificial intelligence to recruit, but never replaces the real-world view of the individual.

Portrait

 

HOW TO APPLY

Submit your CV and complete our questionnaire. Precise details of the next stage will vary by region but will probably involve an interview (in person or video). This will be followed by numeracy/aptitude, analytical, and/or psychometric tests.

If successful, you’ll be invited to an assessment day when a face-to-face interview will be scheduled.

People talking

 

IS IT POSSIBLE TO WORK AND STUDY AT OSTC?

Due to the commitment required during trading hours, we don’t recommend working and studying at the same time. However, the flexibility of our courses should facilitate the requirements of most students.

News & Updates

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We are pleased to announce the appointment of Catherine Langlais as OSTC’s newest independent non-executive Board member. Catherine brings a wealth of experience and knowledge in the fields of corporate governance, compliance and regulation. Her background is as a General Counsel within the financial services industry. Most recently, she served as the Executive Legal Director […]

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ZISHI & Sheffield Hallam partner on trading course for athletes

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ZISHI launches remote training modules in partnership with ICE

ZISHI Cornerstone, the leading trading education provider, will provide a series of remote modularised training courses in association with the Intercontinental Exchange (ICE). ICE and ZISHI have a longstanding partnership. Prior to the outbreak of COVID-19, ZISHI provided 6-day quarterly workshops with ICE, covering a variety of disciplines. Now, these courses have been fully modularised […]

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