How Can I Pursue a Career Path Towards Becoming a Stock Trader?
By Gil Morales
Managing Director, MoKa Investors
I am often asked how one pursues a “career-path” with the objective of becoming a professional stock trader. I suppose that many roads likely lead to Rome in this regard, but in my view the best way to become a trader is to, well, become a trader. But I digress.
While one can go to college and earn a Ph.D. in Finance, obtain a Certified Financial Analyst (CFA) designation, and get a job with a large investment firm, the reality is that most traders I know took a circuitous path to their final vocation as professional traders or investors. Trading tends to “find” a person rather than that person finding trading through the pursuit of a specific career path.
Speaking for myself, I became a broker trainee at Merrill Lynch back in 1991 simply because I was broke and unemployed. Basically, I just needed a job, and badly! I learned that brokers could make a decent living selling “intangibles,” which is what paper investments are. Such vehicles have value and the potential for capital appreciation (or loss) but do not exist in a tangible form.
At that point I became exposed to the world of investments, and I naturally gravitated towards equities, or stocks. I also started making a lot of money trading my own account. In 1995, I was up over 500%, and had grown my account to a mid-six-figure level from an initial four-figure level. Two years later, William J. O’Neil got wind of my personal trading performance, as well as my accomplishments as a top-producing (read: top-salesman) broker at PaineWebber, where I had moved to from Merrill Lynch in 1994.
O’Neil felt that the combination of skills I had as a trader as well as a top-selling investment broker made me someone who could be an asset to his firm. In 1997, he recruited me to join his firm as an internal portfolio manager responsible for managing the company’s own capital and as head of the Institutional Advisory Group responsible for advising over 600 of the firm’s institutional clients.
And so, I became a professional trader. It found me, I didn’t find it, but I had to develop a track record first. Today I am semi-retired as a non-professional, and spend my time authoring investment books and two websites while also trading my own money.
My advice to those who wish to become traders is to find a job where you will be exposed to the business, but are also able to trade your own account. In this way you will be totally immersed in the business, which can help your focus. At the same time, educate yourself by reading every book on investing that you can.
Start by reading everything written by or about William J. O’Neil, Richard D. Wyckoff, and Jesse Livermore. From there branch out to other master traders and investors, people like Victor Sperandeo and Anna Couling, for example, and read their books. Our website, VirtueofSelfishInvesting.com, has a list of our top investment books, which can serve as a useful reading list: https://www.virtueofselfishinvesting.com/articles/view/dr-ks-top-50-wall-street-books
Ultimately, I wasn’t looking for a career as a trader back when I started out in the investment business. I was just looking for a job. But that job put me in a position where trading found me. So if there is such a thing as a “career path” for traders, at least to me, this is the way I did it.