Trading: how to become a stock market trader in 2023?

What is a Trader? What does its activity consist of? What characteristics distinguish him from the investor? How to become a trader? Our instructions for getting started in trading and with what budget?

Trading: what is a trader?

You might be wondering what is a trader? What is trading? A trader is a person who buys and sells financial products on stock markets.. In this sense, a trader is, for example, different from a financial analyst whose job is to carry out studies of companies listed on the stock exchange and to monitor macro-economic news, in order to advise traders and portfolio managers.

In the imagination of many people, the trader is distinguished from the investor by the duration of his positions. Believing that investors are generally positioned for the long term, and that traders favor short-term gains. While it is true that some traders only hold their positions for a few seconds, a trader can also hold a position for several months. The real difference between a trader and an investor lies in the objective that motivates them to intervene in the financial markets. While the objective of an investor is to grow his capital through accumulation, the trader is a trader who seeks to resell what he has bought at a higher price.

high-frequency trading . This form of trading allows profits to be generated through millions of automated microtransactions.

Salaried trader and independent trader

The salaried trader is a market operator whose salary is fixed, and who in some cases can receive a bonus, but depending on the goodwill of his hierarchy. While the myth leads us to imagine a trader working in a trading room within a bank or a hedge fund, many traders work in groups such as Danone or Total Energie . The salaried trader therefore does not generally have the task of speculating on the markets, but more often of managing and attempting to neutralize market risks ( exchange riskexample) to which the company employing him is exposed. Bank traders are in most cases operators whose role is to enter the buy and sell trades of bank customers, and it is more of a stockbroker role.

In 2023, salaried traders who take pure speculative positions have become rare in banks. Algorithmic trading has become so important that the majority of jobs are “Quant Trader” and require excellent programming skills.

He does not receive a salary since he is self-employed.

You may be wondering who can trade on their behalf? In theory, anyone can become a home trader. You will still need 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 earn income from it.

It’s more complicated but quite possible too. It will be easier to trade currencies or cryptos in the evening than scalping stocks in the middle of the morning if you have a busy job.

How much does an independent trader earn who manages to live off his trading income? The amount varies greatly depending on the amount of capital allocated to trading. Nevertheless, we can say that with a capital of 100,000 euros, it is not impossible to earn 3,000 to 5,000 euros per month when you are very efficient. With 10,000 euros of investment, and using a little more leverage (and therefore more risk), the income will be more of the order of 500 to 1,000 euros per month if the performance is there. activity as an independent trader.