Overview: A trader is someone who engages in buying and selling financial assets for themselves or for an organization.
Financial asset examples include cash in hand, stocks, bonds, and cryptocurrencies.
A financial asset is a liquid asset, where the value of that asset reflects the supply and demand in the marketplace that it’s traded in.
A liquid asset is an asset that can quickly be converted into cash.
The main difference between a trader and an investor is how long the individuals tend to hold the assets they purchased.
Investors usually have a longer plan, and traders tend to capitalize on short term trends.
A trader that works for a company are given a limit to how much they can buy, and have guidelines that include a risk tolerance for when they should sell.
These traders are paid a salary and bonuses depending on their performance.
A trader who trades for themself, will use their own money and keep all the profits, however, they’re likely to have less funds to use in the beginning.
Skills required: In addition to a general knowledge of finance and business, traders should be skilled with mathematics or engineering.
They also need to develop research and analytical skills in order to assess economic factors and daily patterns that would impact the market.
Salary potential: According to Glassdoor, a traders average salary $102,000/year. According to Indeed, a trader’s average salary is $82,700/year + average commission of $30,160/year.
In regards to traders (according to Ziprecruiter) “annual salaries as high as $261,500 and as low as $19,500, the majority of Self Employed Trader salaries currently range between $40,000 (25th percentile) to $90,000 (75th percentile) with top earners (90th percentile) making $149,000 annually across the United States.”