Day traders live in a quickly-moving world of volume data and price. They take advantage of assets’ fluctuations in a few seconds to minutes. They scan the market and read the news to determine the market’s direction each day. They have to quickly determine the currencies, stocks, and derivatives to trade that day. If this career sounds exciting, there are a few degrees that are helpful for this lucrative but risky career.
In the past, traders started as assistants or clerks on stock exchanges and were hired based on their intuition and charisma. They learned from experience, and many did not have formal education after high school. But with electronic trading, things have gotten more competitive, and firms want candidates with more education. If you want to succeed in this field, consider getting a degree in finance, economics, or business. The career can be lucrative, so consider taking out private student loans to pay for your education. Many students find it’s worthwhile because it lets them go to school right away instead of working a few years to save up.
Many recruiters like applicants to have finance degrees because many concepts that traders encounter are included in the degree program. Once you graduate, you will have already been exposed to derivatives, corporate finance, accounting statements, and fixed income securities. Many universities also have high GPA standards to be accepted into a finance program. If you’re at the top of your class, you might get experience in managing portfolios with real funds. That’s good practice for the investment decisions a firm will have you make.
This degree exposes you to the business cycle, interest rates, and economic indicators. You’ll learn about important policy decisions, crises, and economic shocks and how they affected the financial world on a global scale. Having a background in this field allows you to better understand current events, which can help you make the best decisions. You’ll also learn about statistical analysis and basic regression, which are used in futures trading.
As more trading is done on computers, it’s a good idea to understand the electronic flow of information. Many firms hire statisticians and computer scientists as part of the risk management team. These professionals also help program the algorithms used for market making, high-frequency trading, or statistical arbitrage. If you like the idea of computer programs making decisions many times a day, consider studying computer science.
You’ll apply statistical concepts to day trading. With a statistical or computer science degree, you can do graduate work in quantitative finance or financial engineering. Each one can be extremely lucrative. If you’re good at mathematics, consider studying physics, engineering, or applied mathematics. This can be a highly mathematical job, especially when it comes to derivatives. Majors in a math or science-related field are in high demand because they can understand quantitative concepts and apply them creatively. For example, some pricing models can be reduced to mathematical equations.