A Day in the Life of a Stock Trader
Stock trading is a fast-moving and high-pressure job that can produce extremely high wages and bonuses. Trading takes a special talent and the best way to become a trader is to intern on a trading desk during your college summer vacations. Starting salaries range from the high five figures to the low six figures. Many firms require advanced degrees in business, math or physics.
There are two types of stock traders; professionals who work for brokerage firms and investment funds, and private individuals who day-trade their own accounts. With a few exceptions, their workdays are very much the same. Traders usually remain trading throughout their careers and some become famous and start their own trading firms.
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Before the Open
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Most traders are at their desks at least an hour before the open of the market to check the overseas markets, read news that might impact their stock or the market as a whole, check technical trading charts and analyst commentaries, plan their strategies for the day, and balance their positions going into the trading day by making sure all trades done the day before appear on the activity blotter and all pending transactions settled as expected.
Trading
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During the day a trader watches the news, market behavior, and executes trades. He also talks to other traders about the market conditions, rumors, news and technical analysis. The trader uses tools such as trading screens that show up-to-the-minute quotes with bid, ask, volume and last trade. The screens also scroll news stories and analyst comments and display the trader's position. Usually, the trader works in a very noisy environment where the emotions are passionate and the language is salty.
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The Close
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Unless there is an important event, the market usually trades along a standard progression, trading up in the morning with some profit-taking around 10 a.m. New York time, a lull in activity during the noon lunch breaks, and active trading all afternoon till about an hour before the close when traders take profits and losses for the day trying to adjust their overnight holdings of securities according to the risk strategies they follow.
Just before the close, each trader ensures all trade tickets have been submitted and recorded because a trade ticket that has been lost or overlooked could result in large losses if the market moves overnight, and sometimes the trader gets charged for part of the loss.
After Hours
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After the market closes, the trader updates the transaction ledger and turns it in to the back-office accounting clerks who match it off with the trade reports and use it in overnight settlement activities.
Misconceptions
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Movies make stock trading look glamorous and easy. It is neither. Good traders are detail-oriented, aggressive people who do not tolerate obstacles. A trader's work is never truly done at the end of trading because news events that may affect the market are happening around the clock and most traders work on trading strategies even after they leave the desk.
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