What is the Role of a Stock Broker?
A stockbroker (aka an investment adviser or a registered representative) is a professional who executes buy and sell orders for stocks and other financial securities on behalf of clients – individuals or corporations. Brokers can also serve as analysts who can advise investors about where and how to invest. Stockbrokers typically have an education in finance, with an understanding of financial laws, accounting methods, principles of economics, and so on.
With the advent of the internet in the financial sector, the role of stockbrokers has undergone a sea change. As everything in the stock market speeds up, thanks to the internet, stockbrokers have an enormous responsibility to use their time efficiently. This article talks about why time management is of utmost significance to stockbrokers.
Part-time Traders vs. Full-Time Traders
Trading technically goes on around the clock even though the stock market works only between fixed hours, thanks to the various time zones and different market close time. If you are a full-time professional trader, you not only have the necessary skills and education to work in pressure situations and keep track of various trades, but you also have access to specialized tools and software that others don’t. If you are trading part-time, you may not be as serious about it because a job is not on the line if we make a few bad trades.
Part-time traders usually have a fixed time window every day when they can afford to set aside their day job and focus on trading, while for professionals, it is what they do from morning to night. This fundamental difference implies that full-time and part-time traders give different levels of importance to the time they have on their hands, and hence, their time management will be different. Some of the methods given below apply to both, even if categorized separately.
Time Management Tips for Full-Time Traders
1. Never Compromise on Analysis
Under pressure to execute a deal, traders often ignore or don’t process all the data properly; they just glaze over charts and screens and assume they got it right, but end up making the wrong decisions because they saw the wrong numbers. A thorough analysis is essential, and if you don’t have the time to study a particular deal properly, don’t go ahead with the execution. Use the time to pick out the trades you are most confident in and execute those.
2. Avoid All Distractions
Most stock trading offices have dozens of television screens all blaring various news items, scrolling bands of numbers flashing by, and of course, many people yelling on the telephones. In short, you are very unlikely to have a quiet moment during trading hours. However, this is no excuse to make poor decisions or to while away the time till things calm down; it is your responsibility to keep yourself isolated from any form of distraction.
Find a quiet corner somewhere in the office, at least when you have to make crucial decisions. It is fine to take necessary breaks now and then to grab a snack or to get some fresh air to clear your mind so that you can work better when you return. It is important not only to use all the time you have but also to use it effectively.
3. Make the Most of Technology
Computerization and automation have revolutionized so many processes around us, and stock trading is one of them. With techniques like algo trading, traders can use code and software to execute trades for them by just mentioning the conditions and parameters to decide when to buy or sell a certain number of stocks. This also enables high-volume and high-frequency trading to happen with considerable ease than they would have if the entire process was done manually.
Time Management Tips for Part-Time Traders
1. Decide Your Time Window
As a part-time trader, you have to give priority to your daily job first, but trading isn’t something that you do properly if you take it casually; you still need to put in the effort and be sincere about it but for a lesser duration every day. So, depending on whether you are trading in the local or global market, set aside an hour or two every day where your prime focus will be on trading; plan your other outside-work activities around this time frame.
2. An Opportunity to Specialize
While a full-time trader deals with a multitude of financial products, a part-time trader might feel like he/she is losing opportunities because they don’t have the time to take part in so many trades. However, this could be a blessing in disguise: in the few chosen assets that you do trade with, you can become highly specialized in those. Understanding a limited variety of products and making better trades with them can still give you enough profit.
3. Know When to Call it a Day
A bit of common advice given to gamblers is, “Quit when you are ahead.” It essentially means that when you are on a winning streak, you should stop betting and go home with the profit earned. The same applies to part-time traders also: trading is only your part-time job, and you need to devote your time to other priorities, so you must know when to stop.
Set goals or limits for your profits and losses: when that number is reached, call it a day and don’t continue trading in search of more money or in hopes of converting your losses. Similarly, make it a point to always stop when the trading hours have passed, no matter what your position is. When you have a routine to trade only between certain hours, your mind and body get accustomed to that fact and hence, the function better according to the situation.
If you plan on becoming a stockbroker, full-time or part-time, these tips will surely be handy when you start working. Not only will it be a hectic life, but a missed opportunity due to poor time management will be costly. However, get everything right, and you will definitely be properly rewarded!
Raj Kumar is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance clap.