What is a trader? What does his activity consist of? What characteristics distinguish it from the investor? How to become a trader? From the choice of the stockbroker to the development of a trading plan, via the use of stock market tools, returns to the basics and presents its advice to you to become a better stock trader. Discover the pitfalls to avoid, a portrait of the best traders and selection of trading training for all those who wish to become a stock trader. Then read below:
Trader and investor: what are the differences between these market players?
You may be wondering what a trader is. What is a trader? And above all, what are the differences between trading and investing? A trader is a person who buys and sells financial products on the financial markets. Trading means positioning you on financial assets with the aim of realizing again at the time of resale. In this sense, a trader is, for example, different from a financial analyst whose job is to carry out studies of listed companies and monitor macroeconomic news, in particular, to advise traders in their positions.
The trader is distinguished from the investor by the duration of his position. While investors are generally positioned for the long term, traders often favour short to medium-term gains. Some, moreover, keep their positions only a few seconds to a few minutes, or for only a few hours.
There are also robot traders that allow you to practice algorithmic trading. It is systematic trading buy and sell orders are based on algorithms as opposed to discretionary trading buy and sell orders are based on the decision of the trader who executes the order.
Salaried trader and independent trader: two statutes for the same activity
Is trading a job? Yes of course. But be aware that there are two types of traders: the salaried trader and the independent trader. The salaried trader is a market operator, working for a banking establishment, whose salary is fixed, and who also receives a bonus linked to his earnings but dependent on the goodwill of his hierarchy.
The independent trader, who trades for his own account it is often called an own account trader, works for himself and his income corresponds to his earnings. He does not receive a salary since he is independent. There are therefore several traders’ statutes which cover very different realities.
You may be wondering who can trade on their behalf?
In theory, anyone can become a home trader. You will still have to learn about trading and devote a large part of your time to it. However, it is possible to be a self-taught trader and make a living from it.
You do not want to go that far and want to keep a different professional activity but you are wondering how to trade when you are working? It is more complicated but quite possible too. It will only require more organization and will partly determine your trading style and the assets traded. It will be easier to trade Forex in the evening than to practice scalping on stocks in the middle of the morning if you have a very busy job.