Oct 01, 2020 03:42 PM EDT
Is a Degree in Finance Enough to Make you an Investor?
The world of financial market trading is deceptively complex, while many of the skills required to succeed in this space often go unheralded.
Take day traders, for example, who tend to execute a high volume of orders within a relatively short space of time (in a bid to pursue short-term profits). To achieve this, they need to analyse huge swathes of data quickly and efficiently, while also understanding the underlying laws that govern change in the marketplace.
While a financial education and a keen sense of determinism may be central to achieving these goals, however, are they enough to guarantee success in the market? We'll explore this in detail in the post below.
How a Financial Education can Help You
When aspiring to be an investor, you may be perturbed by the lack of formal education options available.
However, there's a wide range of degrees and study fields that can equip you with viable tools as an investor, including a general finance or economics accreditation.
The former field will include classes pertaining to accounting, managerial finance, banking and corporate finance, while economic lessons will focus on macroeconomics and organisational management. The latter of which are particularly important for investors, as they help them to understand the economic factors that impact on financial markets and build a diversified portfolio over time.
On a fundamental level, both courses also feature mathematics as a prominent unit, enabling investors to make basic profit and loss calculations accurately and in real-time.
Is a Degree Enough?
This type of degree can provide a solid foundation for your trading career, while it also teaches transferable skills that enable you to work in a variety of financial sectors and niches.
However, there are some ways in which a formal degree may not be particularly helpful, particularly when you consider the issues caused by emotive trading and an underlying lack of discipline.
Often, traders need to look within themselves to develop a sense of discipline and make informed decisions, as they strive to avoid knee-jerk trades and chasing sudden (and often irretrievable) losses.
Similarly, it can be argued that practical experience of the market is the single most important thing for traders to consider, as this enables them to identify its real-time pitfalls and the challenges that unfold on a daily basis.
What are the Other Paths to Trading?
The latter point is particularly interesting, not least because you can often bridge the gap between theoretical knowledge and practical experience simply by using a demo trading account.
Available through all reputable online brokerage sites, these entities offer you real-time access to a simulated marketplace and enable you to hone your trading strategies without risking your hard-earned cash.
You can usually use these accounts for a fixed period of between three and six months, allowing ample time to gain experience of your chosen market and actively identify the most potent risks.
This, combined with private courses and tutorials that enable you to learn the fundamentals of forex trading and similar entities, can provide a robust platform that allows for more sustained profitability and success.
Social trading sites can also offer a clear learning path, and one that allows you to build a viable network of traders and directly copy successful strategies.
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