Many college students what to know what classes to take to become a stock trader. These are just a few to consider while still at university. There are some recommendations that are counter intuitive. Keep in mind, if you just want to a Wall Street job just major in economics, finance or business administration. If you want to “Trade” and be the the one to pull the trigger, this is my personal opinion that these classes will help you become a better stock trader.
Philosophy– This is number one. You’re thinking WTF? Let me explain. Philosophy forces you to ask the question. It’s about critical thinking, and organizing your thoughts. It’s an internal debate that hones the skill of objectivity. Questions like “does God exist” or “who am I” forces you to look within. Objectivity is the key to be successful when trading stocks. You need to be able to say “I’m wrong” and get the hell out of a trade before you lose your shirt. It’s harder than you think. Trading is mind game, and you’ll be competing with the greatest minds when trading the markets. Too many traders I’ve seen never knew how to let go, and be objective about a situation. It’s the question that’s important, not the answer.
Accounting 101 – You need to learn how to read a balance sheet. All publicly traded companies are required to disclose financial statements in a standard format. Accounting will help you understand what the companies expenses and how much money they are making. It will also tell you if there is growth, and give you insight about how well the company will do in the future. It’s important that you can
Economics 101 – Supply and Demand is the name of the game. Whether you’re talking about healthcare or the price of a barrel of oil economics comes into play. Supply vs Demand together bring equilibrium to determine a price point for what ever stock or commodity you are going to trade. It is the study of resources of finite value. It also will help you understand the dynamics of global economies and the forces that determine the future wealth of nations.
Math and Statistics – This is a no brainer. You gotta have some basic math skills. At minimum you should be able add and subtract. Try to get at least to Calculus level. Stats is important because it’s a robust metric to gauge probabilities, aka odds. Stats also plays a huge role in understanding game theory. When trading the markets you want to bet only when the odds are in your favor.
Game Theory – This is a branch of economics department. This meshes math, philosophy, political science, and statistics. It’s about behavioral economics. How incentives affects the decisions of players in a game of chance. Some topics include probabilities of elections, and other obscure subjects like Black Jack and Poker. The stock market is one big game, learn how to stack the odds in your favor by observing the incentive of your opponent.
Political Science – Politics and government have a interrelationship with the financial markets. Policy implemented can affect how the markets behave. Governments rising or falling, presidents elected, regulations enacted all sway the market. Not only does US government policy affect the market. Governments abroad will
Finance 101 – What is a bond, a stock, a stock market index etc. This class is bare bones finance, that will get you familiar with much of the terminology used in finance. While it’s a very general class it’s important to become familiar with all forms of asset classes, it’s structures an it play a role in the world of finance.
These are just a few of my recommendations, if you have any other suggestions please leave a comment below.