Corporate Lawyer to Trader

Beginner Questions
1

Question: What qualifications are needed for a trader to be taken seriously by the industry ?

I did not do finance in uni but if I had a consistent track record with the markets, should I pursue some sort of finance qualification ?

I have heard that some traders posses a CTA certificate ( Commodities Trading Adviser) and have seen some with a CFA qualification. Do they matter? Given that I did Law, what qualifications should I try and obtain now ? I am in my mid twenties ( if my age might matter)

Many thanks in advance for your kind advice.

Goals

My goal is to be able to manage money for other people if I get a decent track record of consistency.

In the alternative I hope to be hired by a hedge fund if possible.

Background

A little about myself, I was previously a corporate lawyer with a specialty in energy and projects. WhilstI enjoyed my day job, I found myself drawn to towards speculating what impact if any would a given deal have on the markets.

Following the BP blowout fiasco for example, an analysis of the legal structure and contracts pointed towards BP not being fully liable for the incident given the other indemnities and contractual protections in place. This I was told, might be an edge for a lawyer wanting to get into the business of stock picking.

Current level of understanding of the markets

I do not hold a degree in finance but I have put myself up to speed with understanding candlesticks, S/R levels and etc.

I am not consistent yet in my results. I consider myself as a technical trader holding positions for no longer than 3-4 days at most. I understand basic money management and trade sizing to limit my risk to 1-2% per trade.

I currently trade forex for experience but might utilise my edge in the equity markets by focusing on distressed companies that are currently in litigation…

Personality

I can stick to a strategy and can bear drawdowns of up to 25%.

I am learning now with a 4 digit account but can ramp it up to 5-6 digits if and when I am confident in my consistency.

I am reasonable with my expectations and and happy with at least a 2-3% return a month.

2

If your goal is to trade other people’s money then the best thing to do is develop a strong winning track record with a good risk profile. If your goal is to work for an organization that manages money then and MBA or CFA is likely a requirement to get you in the door, unless you have a specialized skill set that a particular company needs.

3

If you’re in the uk then you will need to be deemed as competent by the fsa. I believe the minimum requirement for competence for what you are looking at would be something like the investment management certificate along with cfa1.

4

Thanks for the responses so far. Good advice in forwarding me towards CFA and IMC.

As for work experience should I be gunning for

  1. Working from home at the mean time to build consistency ?
  2. Investment Banks ? (treasuries department perhaps)
  3. Prop Firms ?

Having read turtle traders by Richard Dennis, in hindsight, it seems no qualifications might be even needed.

Or perhaps am I disillusioned in the current market given the ease of access to information and advanced charting tools?

6

Its such a coincidence. I did law too at Bristol :slight_smile:

Law is great but I was keen to be up for new challenges. I found myself reading more finance stuff than law anyway.

To [B][U]speed up[/U][/B] my learning curve would you recommend paying for classes ? I met some education providers at the last Traders Expo in London namely Knowledge to Action and Online Trading Academy. I understand that theres a lot of material online and that trading is really a journey of self to find what works but was thinking that it would be great to have a coach.

7

Building credibility is the thing you need to do. Speak to big firms and try and get your foot in the door. Play the corporate lawyer card and use your professional status as leverage. Tap any contacts you can and also run you’d own portfolio consistently and be quite free with the records on your account.

It is still mostly about who you know and your ‘perceived’ skills and professionalism. Once your in you’re in. Unless you balls it up that is :slight_smile:

9

You’re ALREADY OVERQUALIFIED to be involved in this business i.e. LAWYER to TRADER??? As I noted somewhere else at some point: EVEN LAWYERS and PROSTITUTES have higher moral standing and fibre than most brokers!!! LOL!!!

And JUST in case there is any doubt: no offence is meant by the above. I just have that kind of sense of humour is all (although ‘many a true word spoken in jest’ as they say). LOL!!!

Welcome to hell!!!

Regards,

Dale.

11

To become a respected trader, you don’t need certain educational degrees or courses. I think the best way is to show other traders your results, which will indicate your professionalism.

12

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15

In that case, no degree is required rather you should maintain a trading profile of yourself to show others.

16

Regarding any relevant qualifications required for either of your goals that is something you should be able to reasonably easily reach yourself. After all you are a lawyer, right?

Then considering trading track record and knowledge I think you have a long way to go before you will be ready for achieving your goals.

Since you hope to handle other people’s money 25% drawdowns will not be acceptable compared to what you personally can handle. Especially when you are only happy with 2-3% monthly returns. As a guide for risk tolerance when handling other people’s money you could research the requirements to pass different Prop Companies funded trading tests.

Compared to your current risk appetite you will quickly realise that risking 1-2% per trade can quickly blow your chance of passing a funded trader evaluation. Likewise not many investors would be satisfied with large drawdowns.

Lastly to expand your trading knowledge I suggest you search for a professional trading course that is packaged by a trusted professional trader with real industry experience. Personally I know of two such companies running such courses. Firstly Traders4Traders and secondly G7FX. Both of these courses have a combination of technical skills and fundamental skills.

Wishing you all the best in running after you dreams and goals.

17

I’ve come across traders with CTA and CFA certifications, and yes, they do carry weight. However, your legal expertise might offer a different angle in market analysis. Maybe explore courses that bridge law and finance, like financial law or investment law. It could complement your skills and set you apart. Considering your goal to manage money or work for a hedge fund, networking is key.