Advice for Millennials Getting into a Career of Financial Trading
Millennials are among the savviest, entrepreneurial people looking to get into the job market right now. Fully embracing technology, social media and other recent innovations and communication techniques, millennials are firmly of the ‘new world’, dragging older generations into the 21st century kicking and screaming. If you’re a millennial, and you’re relatively technology savvy, then a career in financial trading may be perfect for you. In this post we look at the essential advice for millennials who are looking to get into financial trading.
How to Get into Trading
Historically, trading has always been a high barrier-to-entry field. This is because, to work for a large financial corporation or trading company, you generally needed both large amounts of experience in the industry and a degree in finance from a respected university.
However, the rise of the internet and technology means that this is no longer the case. Now, all you need is ambition, a desire to learn and perseverance in the face of adversity. Although the barrier to entry has undoubtedly been lowered so that the markets are more accessible to the average man, this doesn’t mean that it’s any easier to make money and it can still be incredibly difficult to stay in it for the long haul.
But, trading-careers are now available with a low barrier-to-entry. This is especially true because new careers require only a small amount of capital to get started. Again, this is ideal if you’re looking for a new career in financial trading, because it’s likely that you don’t have a large amount of money behind you.
Plus, if you don’t want to trade full-time, finance markets are the best place to seek an alternative career. This is because they’re so interlinked thanks to improvements in technology and access. You just have to find the right market and the right opportunity. Here are the top 3 pieces of advice that you need to do just that…
Know Your Independent Options
Although barriers have been eliminated to a large extent, to work for a large institution you’re likely to still need a degree. As such, working independently remains your best option for entering the financial markets.
Working from home provides you with the best level of flexibility. As a millennial, you’re unlikely to have large volumes of capital behind you, and working from home will reduce your overheads and thus save cash.
Once you’ve decided where to trade from, you’ve got to decide what you’d like to trade. The idea of trading stocks and shares may be glamorous, but it’s also capital intense. Generally, most trading accounts will require a $20,000-$30,000 equity requirement, which is a huge down payment. Below this level and you’re not allowed to trade. As a result, it’s best to explore alternate options. You can always come back to stocks once you’ve built your equity.
Other markets, however, require less capital, making them perfect for millennials looking to enter the financial markets. So take a look at:
The forex market – The forex market is the most liquid in the world. It requires incredibly little capital to enter, depending on the account you have. An account can be opened with as little as $100 and, because you can trade with leverage, you can control large volumes of capital with small amounts of money. For 6 days a week, the market is open 24 hours a day, so it’s a great option if you’re only trading on an evening outside regular trading hours.
Contracts for difference – Over the past decade, the contracts for difference market (also known as CFDs) has expanded hugely. CFDs are electronic agreements between two parties over the price of an asset. Crucially, a CFD involves no ownership of the underlying asset. As with forex, leverage can also be used which means that only small amounts of capital are required to actually enter the market.
Spread betting – If you’re looking for fast paced trading, then spread betting is probably the best option for you. It allows you to take a position without owning any of the options, and your initial deposit only needs to be a fraction of the actual product price. Again, this is a leveraged position, meaning that your exposure is increased alongside the size of the trade.
With all of these leveraged options, you can make large profits from small investments. However, it’s also important to know that, should the market move against you, then you can mount sizable losses. So, although the potential reward is greater and large amonuts of capital aren’t necessary, the potential for substantial losses are also much greater. To read more about leverage, click here.
So, now you’ve picked what you’re trading and decided where you’ll be trading from. So, as a millennial, how can you stay ahead of the markets?
Read and Follow the Market
To beat the markets, you have to know them inside out. Plus, as a millennial, you’ll have a distinct advantage over other traders. As someone who is well versed in using the internet, you’ll be able to get information quickly via news sites and social media.
It’s well worth bookmarking sites such as Bloomberg and the Wall Street Journal. By constantly monitoring sites and stories, you’ll be better informed about how markets might move. All of this technical and fundamental analysis can then be used to inform your trades, no matter what market you’re operating in.
Practice Makes Perfect
Finally, once you’ve made all the above decisions, you need to practice. Although it’s easier to trade than ever before, trading still isn’t for everyone. Thankfully, most brokers now offer demo accounts, so you can ‘try before you buy’, so to speak.
These allow you to trade without investing your own cash, and you can even use a demo account to work out your own trading strategy and see what works for you. Reading about them online is one thing, but using them in another.
Finally, when you do begin, start small. Don’t risk too much early on. Realise that you’ll make mistakes and that you’ll need to learn from them to improve. Start with small lots and don’t try to grow a large portfolio immediately. You’ll be a much better trader for starting slowly and keeping risks levels low.
To conclude, as a millennial, it is easier to enter the trading markets than ever before. Decide what to trade, don’t be afraid to be independent, learn slowly and try a demo account first. If you do all of this, you should have no problems whatsoever.