CFA too good for trader?

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marco096

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Hey,
So I have been talking with some people about my aspirations to become a trader, and was told on some occasions that this would be low achievement for someone with the CFA designation.
Do you guys agree/disagree and why?
I mean, traders can make millions of dollars. Sounds like good achievement to me.
 
I think what they meant is that trades are 95% technical oriented, while in the CFA you may have 1 chapter on technicals and the rest is fundamental based.
 
CFA doesn’t have a lot to add for traders. Until recently the CFAI CBOK was anti-technical analysis. Only recently have they opened up a little towards it.
So if you want to be a trader, CMT is more designed for that. I don’t know how much respect it commands in the trading community, but the reading material is certainly more oriented towards it. I went through parts of the Pring book and found it very useful.
 
About the CMT, are the readings actually just chapters out of 3rd party textbooks? Much like a university course? I’m not gonna spend money to get the charter, but am interested in reading their curriculum and this idea that it isn’t one nice package like CFA provides is new to me…
 
I have the UK equivalent of CMT and I agree that most traders don’t need CFA. Trading is a different field to investment management. From an economic point of view, traders exist to provide liquidity to long-term investors. They don’t need to understand why the long-term investors are doing what they are doing, they just need to make sensible short-term predictions and manage their risk properly. CFA wouldn’t hurt but it would probably be a poor use of time compared to just working on your trading system.
 
Obviously, if a trader wants to add value by developing business relationships with investor clients or wants to eventually move into investment management themselves, they should consider the CFA charter.
 
Thanks for the reply.
Who earns more you think: traders or investment managers?
 
marco096 wrote:
Who earns more you think: traders or investment managers?
Click to expand...
I don’t honestly know. But I can tell you this–don’t decide on a career based on who makes more.
And remember that when you read statistics such as “The average portfolio manager with 10 years of experience makes $X per year”, that only includes those that survived the internship, worked like a trojan as a security analyst, and finally sloshed their way to the top. 99.9% of people never make it that far. So to say, “I’ll just become a portfolio manager and make $X in 10 years” is probably not really a fair statement.
 
As far as compensation is concerned, the sky is the limit both for traders and for investment managers.
Traders generally have shorter lifespans however, because their techniques can quickly become obsolete. If their techniques are successful they can quickly make a seemingly unlimited amount of money. If their techniques don’t work or become obsolete, the market will remove them from the field of play. By their mid-30s, most serious traders have either made enough money to retire or have busted out.
Because of the nature of long-term investing, investment managers tend to have a longer lifespan, although actual achieved returns will sooner or later have their effect on the career outcome.
Do whatever you find the most interesting.
 
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