We receive multiple inquiries every day from traders interested in a managed account career.
The allure of a job as a professional money manager cannot be disputed, especially for those who have a natural affinity for trading the financial markets. Furthermore, if a trader has experienced with Forex (foreign exchange) as an asset class, careers in managed FX offer the most benefits of all.
So what should a trader do if he wants to pursue a career in money management? Based on over 10 years of experience incubating and working with traders and investment managers, here are some recommendations:
- Get Educated - And by this we don't mean to get a Degree in Finance. Don't get us wrong here. Education is important for everything in life, but don't make the mistake of thinking that traditional academics can teach you how to become a successful trader. In fact, most College and University programs are very theoretical in nature. A successful trading career takes plenty of patience, practice, trial and error, as well as plenty of sweat, blood and tears to get there. Academic education is not a substitute for that. What we're referring to here is PRACTICAL education. Read books written by traders, participate in trading forums, find a good strategy you like and master it, etc. When it comes to taking seminars, we urge you to take heed. Many vendors out there charging an arm and a leg for seminars are doing it all with hype and marketing. Be extremely careful. There are plenty of free sources you can tap into first (read, "How to Become a Professional Trader" for more information).
- Lose a lot of Money on a Trading Demo – As mentioned above, an important educational step on the path to a future money management career is "practice" – and lots of it. There's really no better way to practice your trading than using live market prices. The problem is that many novice traders would go bankrupt if they used real money for all their practice sessions. The good news is that there are trading demos or simulators available that traders can use to practice their stuff (see our demo page for more info). Traders don't have to spend a dime to practice on a demo while they're learning how to trade or apply a new strategy in the live market. It's really the smart way to do it. The problem with demos is that they leave out one essential ingredient traders need to master before reaching professional status: psychology. The game changes completely when real money is on the line. That is why, no matter how successful a trader is on a demo, he must eventually start practicing with real money, even if it's placing very small trades at the beginning (with our MT4 platform our traders can trade a minimum of 0.01 lot, known as a micro lot, per transaction). So go ahead and start getting the losses out of your system, but with a demo of course!
- Establish a Track Record - "A what?!?!? Wouldn't that take years to do?!?!?" Not necessarily. The money management industry has changed dramatically over the years. No longer is this space reserved for Ivy League graduates with famous last names who kiss ass and wind up managing a billion-dollar mutual fund. There are organizations out there willing to take a look at an emerging class of talented traders who would not have been given a job interview 15 years ago. This means that these firms are flexible when looking at their job candidates. They are willing to overlook some of the traditional or formal ingredients when it comes to choosing their traders and money managers. Some companies, for example, would consider looking at the trading statements from a personal account or a proprietary strategy that hasn't made it past forward testing on a demo. To give you an example, Forex Day Trading takes preliminary applications via our recruitment program from pretty much any trader. That doesn't mean we don't reject a lot of applicants. We do; but we're willing to take a peak. Depending on how active a trader's style is and other factors, we might be willing to start allocating some capital (albeit small) to a trader who is pursuing a career in money management and has close to 6 successful, active months of trading!
- Don't Become a Rogue Trader - It is essential that traders who want to make professional trading a career, focus on strict risk management at all times. Traders who always make the controlling of risk a priority over "hitting it out of the park" will be around for a long, long time. Unfortunately, it seems that every year there's another big news story about a trader going rogue. If you are lucky enough to get to start a career managing money, all you have to do to cut it short is go rogue. There are no second chances after that. Fortunately, all rogue trading episodes could have been avoided if traders would have done what they're supposed to: MANAGE THEIR RISK!!! So, do yourself a favor and leave your ego at home. You're not God. You will be wrong at times and lose money; so learn how to control risk well by limiting your losses. You'll go a long way in professional money management if you do.
- Always Hold on to Your Dream – At one time or another, have you heard someone blurting out something like, "Every 9 out of 10 traders lose money," or "trading is gambling?" It is true that trading is difficult, but so is brain surgery or playing leading actor in a Hollywood film. Nothing great comes easy, otherwise, everyone would be doing it. If you want to manage money as a career, you need to make sure of one thing: it has to be your passion. We don't want anyone out there to force themselves to trade if they are going to be miserable doing it. You need to have a passion for it. It needs to excite you. But if it does, don't let any of the naysayers squash your dream. Dream big and follow the advice on this page and you'll have an edge over most candidates. Godspeed!