A junior trader is a person who works for an investment bank or private equity firm. Many are responsible for analyzing potential investment opportunities and assisting senior traders in executing trades. The duties of a junior trader also include tracking and reporting trades and price fluctuations on a specific investment. As an alternative to working for a prestigious investment bank, an aspiring trader may decide to trade his or her own capital initially in order to establish a positive trading record.
Many investment banks will train junior traders by allowing them to present the firm's investment strategy to potential investors. The presentation skills gained by the trader will allow him or her to gain a better understanding of the core business model of the firm. In addition to presenting to investors, the trader will often be responsible for trading a small amount of investment capital. Senior traders typically monitor the actions of the trader and assist him or her in executing the firm's investment strategies. Upon establishing a successful trading record, it is possible for a junior trader to be promoted to the ranks of senior trader.
Becoming a junior trader is extremely competitive and anyone considering starting a career working for an investment firm will need to have a formal education. Most traders have a bachelor's degree in business, finance, mathematics, or accounting. Individuals looking to aggressively move up the corporate hierarchy will often have a master's degree in business administration and may pursue additional financial certifications and licenses. Due to the competitiveness of the industry, it is always recommended that aspiring traders continue to build upon their subject knowledge and credentials.
An individual looking to become a junior trader will need to be able to learn and internalize a wide variety of trading strategies and asset classes. Although a junior trader can begin his or her career in a wide variety of asset classes — such as equities, commodities, or currency — there are various mechanisms for trading in the marketplace, such as options, futures contracts, and much more. A trader will initially be trained in the asset class that best fits the need of the firm, but over time many traders begin to develop their own trading strategies and implement them into their daily routine. This can often be extremely beneficial to successful traders as their income is directly affected by the amount of profit generated through their trading activities.