The stock market lures investors with the hope of lucrative profits. Added to that is a constant thrill that exerts a certain appeal. The traditional job of the stock trader is, however, experiencing a downward trend. The number of full-time jobs is steadily decreasing, while the share of automated, computer-controlled business in the industry is rising. Nevertheless, interested newcomers still have the option of pursuing stock trading on a part-time basis.
The profession of the stock trader – Examination at the Deutschen Börsen AG
Entry into the profession of the stock trader usually begins with training at a bank. Alternatively, traders list a completed degree in economics on their CV. Admission to stock trading requires a course at the Deutsche Börse followed by an examination. Topics covered include the settlement of transactions, price formation on the exchange, and applicable stock exchange law. After successfully passing the exam, Deutsche Börsen AG issues the title of exchange and securities trader.
Declining positions: Pursue stock trading as a side activity
In view of the declining number of available positions in stock trading, an increasing number of traders decide to pursue the business privately at their own risk. This entails challenges and dangers. On the one hand, private trading requires a certain amount of start-up capital. On the other hand, losses directly affect personal assets. Therefore, it makes sense to pursue trading on the stock market as a secondary activity. An additional primary job with a secure monthly income helps spread the risk.
High profits possible when trading CFDs
If approval from Deutsche Börse AG is missing, there is the option of trading with a private broker. In this regard, Contracts for Difference (CFDs for short) represent an interesting possibility, for example. These contracts for difference belong to the so-called leveraged products. Here, the trader moves sums that exceed the capital invested. As a result, there is a chance of high profits even with a comparatively small amount of capital.
Trading with CFDs takes place via a broker. Buyers of contracts for difference speculate on the price development of stocks, currencies, indices, or commodities. The trader indicates whether they expect rising or falling prices. With the correct forecast, significant profits can be made as a side activity. The profit is calculated from the product of the traded units and the price difference. Conversely, due to the leverage effect, there is always the risk of immense losses.
Therefore, a careful and well-founded approach with an appropriate risk strategy is required. It is always important to consider which events lead to further changes in prices. Important influences come from the economy and politics. As here reported, for example, Donald Trump's election victory in the USA led to a considerable price increase on Wall Street.
