A Career in Commodities Training Takes Time to Build
Money controls every function of the world, and commodities trading advisors play a key role in that exchange. The National Futures Association defines a CTA as an individual or firm that directly or indirectly advises clients on the selling and buying of futures or options contracts. As professional money managers, CTAs are required to be registered with the Commodities Futures Trading Commission.
There's no formal education process to become a CTA. Although it may be helpful to first start at a trading firm prior to beginning a CTA career, it doesn't guarantee a successful career nor is it required by federal regulations. Many CTAs have had little to no formal training and still proven themselves successful. However, working first for a firm can help you decide if you really have a knack for trading futures.
Although there is no formal training process required, you still need the credentials. Even before applying to the NFA, you must pass the Series 3 exam. This 120-question, two-and-a-half hour test measures your understanding of the futures market, including its makeup and regulations.
Like any other test, you may benefit from tips and suggestions on test preparation, as well as strategies to take the test. There are many professional study guides specifically aimed at the Series 3 exam. Practice tests can keep you from being blindsided the morning of the test.
First you must ask yourself some important questions. Are you really ready to become a CTA? How successful were you in investing in the stock market, and was this success proven over a variety of market conditions? Some success is simply market luck. Real talent can sustain itself over many market conditions.
Also, consider your finances and personal situation. Starting an investment business is risky, and timing is everything. Unless your CTA firm has a substantial amount under management, you can pretty much count on not seeing a paycheck the first year or two. Even managing a $1,000,000 account with a 2 percent management fee would only earn you $20,000 a year, or $1,600 a month.
Plus, you'll also face trading costs, rent, technology costs and fees for traditional support. Establishing a successful CTA career takes time. Be sure you have money in the bank before you begin.
If you have a natural eye for investment, however, you should do pretty well in the long run. CTAs are a vital to the marketplace. Learning to spot the changes in the industry before they happen is the key to a sustainable and lasting career.
Article Source: FxTradingStock.com
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If you're interested in learning more about this career would like to become a CTA this site is a great place to learn more according to the author.
by: Bill Johnson
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Date: Sun, 19 Apr 2009
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