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Five tips on learning to Trade

A lot of people in the industry will tell you there’s no way of just learning how to trade, which is a fair point because otherwise we’d all be doing it and making dollar bills. That said, there are ways of getting a hold of the basics and seeing if you’re cut out for the role before you begin your journey through the trading world.

1. The uni-que way

If you’re a uni student, then your university finance society will more than likely have a place where you can star, as many societies across the country offer a trading or investment club as part of their service. What these will allow is you to do is get some basic training in the nuts and bolts of the profession, and then allow you to use your knowledge by practicing the management of a student-run fund.

You’ll more than likely have some seminars and so forth on how the market works before learning by trial and error with small amounts of money. Trading competitions within the society, industry talks and more advanced training will give you more of a taster throughout your time at university.

2. Spring into action

If there’s one thing that’s obvious, it’s that learning from those who do this for a living is a huge opportunity to boost your skill set. By attending a Spring Week with an investment bank, you acquire training, contacts and real-life experience which will be a huge boost when it comes to applying for jobs and internships.

If you’re successful in getting a place on one of these Spring Weeks, you’ll spend time at the offices of your chosen employer, learning how to read the markets and meeting those who are at the top of their field.

You’ll need to make a formal application to be considered for a bank’s Spring Week opportunities, and there may also be an interview, but all of this sets you up nicely with experience for when you apply for both internships and jobs.

3. The Internship

Internships will allow you to deepen your knowledge, getting a real lowdown on what life is like in a trading office. Most last between ten and twelve weeks and over the course of that time you’ll do one-on-one shadowing, take on real tasks of your own, and see if the trading environment is one which you genuinely enjoy.

As you’d imagine, these are quite highly sought after, so you’ll need to be at your best during the application, showing your skills in an academic sense as well as your financial extra curricular activities and your interest in pursuing the sector as a career.

4. The IKEA (DIY) Method

Interestingly, with the technologically sound world we live in these days, anyone can now be a trader (in theory) because you can just do it at home. Many people just trade on the markets for themselves, rather than for a client or on behalf of a bank.

That said, we don’t suggest you dive head first into trading with your own funds – it’s really not worth risking your student loan for it and having to live on Tesco value garlic bread for a term, we promise. (No bank will think that’s a good anecdote, although it will make your friends laugh at your stupidity.)

There are some apps, games and schools that simulate the trading experience and let you understand the way the market that can fluctuate whilst not losing any real money, but be warned that the pressure of using real funds is a very different ball game to playing a game on your phone, even if the principle is the same.

The schools mentioned often offer courses to sit you in the hot seat and trade without losing money, but they in themselves can be expensive and have the same issue at their heart – they don’t come with the psychological pressures of losing real money for real people. Just something to be aware of.

5. Commercial awareness

An aspiring trader should never underestimate the importance of commercial awareness within the industry, as understanding what’s going on in the business world allows you to develop an intuition for possible effects on the markets – vital for when it comes to making snap decisions in a trading role. The best traders can read the markets and know the triggers that lead to fluctuations almost by their very nature.

Therefore, a huge part of learning to trade successfully is the development of your commercial awareness. If you haven’t already started to engage with the news and how the markets are affected by different world events, then now’s the time to grab yourself an FT or an Economist subscription, get to grips with the BBC News website and deepen your understanding of how the markets tick.