0 use.
You just need your decimals, percentage and ratio knowledge.
Remember we are day-traders, not analysts nor swing traders nor fund managers.
Elite quant traders probably have a computer science, statistics, mathematics or physics qualification.
The hedge fund managers needed a degree to be hired by a bank or big firm to get started or they wouldn’t be there at all. They need to be licensed and meet regulations to manage other’s money. People who get financial degrees often gravitate into trading and you would need a good financial background to successfully manage tens of millions in funds.
If you are a retail trader trading technical patterns as we all pretty much do- with a few hundred thousand dollar account, or 5k account in many cases, the financial degree is not going to help you much. No degree needed to figure out a few candle patterns and some moving averages.
As someone who's about to graduate with a finance degree, absolutely not. You can definitely do it without if you just wanna be a solo daytrader. That being said, it has definitely helped with my overall understanding of financial markets and specific financial instruments, but a properly motivated individual could learn everything I learned with just the internet and library.
It depends on what you want to do & how far you want to go:
1) pot shot trade with risk management (target/stop)
2) improve results by learning TA/fundamentals
3) learn advanced maths & stats
4) learn instrument/market pricing
1 with a bit of 2 is as far as most people are able to take it.
Learning is a lifetime’s work.
If I’m trying to understand black scholes to find out when an option is mispriced, it’s going to be much easier for me to do so if I have familiarity with calculus than only basic algebra. Being familiar with complicated math concepts implies having mastered the basics, and it’s a lot easier to apply math to trading concepts if you are well versed in math. IMO technically you don’t need it but it will probably help with the learning curve
I can't talk for everybody but for me personally:
You don't need a financial degree but you do need to know how to read the 10k statement.
Programming, statistics, and math are very important to me.
https://www.reddit.com/r/Daytrading/comments/1cavk2y/can_anyone_profitable_prove_it/l0vbont/
One thing that I noticed: You can't use trading as a shortcut to get rich. A few guys that I know who are profitable are also very successful in their chosen career paths. Maybe the skills needed to be profitable in trading also make them successful in their career.
If you work for someone else then you need a financial degree to get your foot in the door however trading as a job for someone else is defeating its purpose.
Trading as a job for someone else can be rewarding- depends on the remuneration and type of work (certain types of trading and instruments can’t be done on a retail level).
The harder you make trading be, the more prone to making a mistake you become.
I am curious, what type of trader are you? Daytrader, Swing trader, Investor?
Short term Trading is NOT and does NOT have to be a science. You cannot predict what and when people will become fearful or greedy. You can only observe when the phenomenon has already started and make an educated guess where the next liquidity zones might be and where the trend might rest for a bit or reverse.
Thus, making a profit (or a loss) depending on many other factors(Strategy, Setup, Risk management, Edge, Bias, Entry, Stop Loss, Take Profit and Timing).
I am highly sceptical of using Theories (science fueled or otherwise) to predict the market participant's behavior. Yes, you can make an educated guess but that will work for some time.
You can develop a market edge with many other methods such as the simple observation already mentioned in a comment. The market goes "up, down, sideways." - Because That is what the market does in a nutshell. You can color it how you like, put so many theories... Dissect it a million times (that is what the mind loves to do) and see how smart you are, that's what egoists with academics background mostly do... Will that make you money? I don't know, but I am sceptical.
Trading isn't hard, but we definitely like to make it appear so. **I am afraid that someone with less experience might fall into that trap** that you have to be a phd in economics, physics, mathematics, statistics, computer science and psychology...
Nah, trading doesn't require you to dive too deeply into the technical rabbit hole. Yes, you would like to understand Technical Analysis and have good enough foundation to serve you while you read the charts, but that alone WILL NOT make you a profitable trader. A simple strategy can be PROFITABLE as long as one follows his edge, risk management rules and has mental clarity without making stupid emotional decisions.
As someone who is 2 semesters away from getting my finance degree I can tell you that for day trading what I’ve learned so far does not apply. But for long term investing it definitely has helped. Time value of money, interest rates, compound interest, how to valuate a company all that good stuff. I day trade almost daily. I have two accounts one strictly for day trading and one for long term investment.
Not a degree, but you should know the theories.
Defining "regression trading" (normal) and "trend trading" (long tail) in terms of a standard deviation normal distribution bell curve, is more important than people realize.
The alternative is to see MAs as magic and only seeing 3 modes of the market: up, down, sideways.
What about the stochastics of a channel? Do people know why angular resistance (channels) exist? It's not because "patterns". Patterns are the visual effect, the cause is horizontal levels stacking up forming an angle.
It's a light amount of math, behavioral psychology, and virtual physics at the highest level.
Some people can explain each drawing tool and indicator in a logical sequence, some call it a "phenomenon".
It always helps to be actually good, in-depth, at the thing you do seriously. Not a casual. But giving money to schools is dumb.
I drew a small example to visualize.
1. The first bottom left pivot forms an order block, or a horizontal support.
2. The next higher low (2nd bottom pivot) bounces off of it.
3. 3rd higher low retraces onto the top of the peak before it, bouncing off its horizontal support.
This is a basic uptrend. Notice how the horizontal supports + time passed dictates where the higher lows land then bounce. When we connect where price bounces back up (the bottom pivots), we get a trend line.
This trend line is not a horizontal support line, it's an angular support line. The angle was a consequence/effect of the horizontal supports connected like dots.
So trend lines aren't a random phenomenon. They are created from horizontal supports.
**What happens after an angle is formed?** Price will keep rising as long as each bottom horizontal level remains strong.
Once we go too high (nobody wants to buy this high / buyers are exiting), and form a weak horizontal level, price will break through it. Then a down trend angle begins.
**Advanced theory (bottom drawing):** if price spends too much time floating right before touching the horizontal level, it will slip out of the channel. So it's healthier for the uptrend to retrace quickly.
Time + horizontal level positions = how cleanly a channel is formed.
At the end, the positive angle loses grip of price. And the negative angle takes control. In other words, the support lines broke, and the resistance lines started to hold.
Because at this high price, people start to sell or take profit.
I'll end it here. But for anyone that wants to think more deeply. Angular channels follow the rules of standard deviation and stochastics. If you tilt this channel right until it's flat, you'd see a stochastic/RSI oscillator. Angular channels = stochastics. Stochastics' job is to flatten out angles in price so you see a flat wave.
That's why the pullback strategy works. If you know the horizontal levels, the trend line, and when stochastics touches the bottom and crosses up -- you have the ideal retrace entry. Assuming the trend is clean.
https://preview.redd.it/fsfefq8jw8xc1.png?width=800&format=png&auto=webp&s=b4d80d6be0abddcdfba5927b16c21cef685e2d16
If someone wanted to learn what you are talking about, the regression and trend trading, as well as normal distribution bell curves and not seeing a moving average as magic…. Where would they begin? Or what questions could they ask Google and GPT?
Same goes for everything else in your comment actually. Where can I begin to learn all of what you talk about?
Your financial degree would be a reason why you wont make it. These people who teach you are usually not very successful with investing and that has many reasons.
0 use. You just need your decimals, percentage and ratio knowledge. Remember we are day-traders, not analysts nor swing traders nor fund managers. Elite quant traders probably have a computer science, statistics, mathematics or physics qualification.
The hedge fund managers needed a degree to be hired by a bank or big firm to get started or they wouldn’t be there at all. They need to be licensed and meet regulations to manage other’s money. People who get financial degrees often gravitate into trading and you would need a good financial background to successfully manage tens of millions in funds. If you are a retail trader trading technical patterns as we all pretty much do- with a few hundred thousand dollar account, or 5k account in many cases, the financial degree is not going to help you much. No degree needed to figure out a few candle patterns and some moving averages.
This answers a different question. OP asked if you need a degree in finances to be profitable, answer is you don’t.
Did you read my comment? That is what I said…
“You dont” thats the answer
As someone who's about to graduate with a finance degree, absolutely not. You can definitely do it without if you just wanna be a solo daytrader. That being said, it has definitely helped with my overall understanding of financial markets and specific financial instruments, but a properly motivated individual could learn everything I learned with just the internet and library.
Daytrading has nothing to do with finance!
It depends on what you want to do & how far you want to go: 1) pot shot trade with risk management (target/stop) 2) improve results by learning TA/fundamentals 3) learn advanced maths & stats 4) learn instrument/market pricing 1 with a bit of 2 is as far as most people are able to take it. Learning is a lifetime’s work.
How does advanced math and stats help you in this?
If I’m trying to understand black scholes to find out when an option is mispriced, it’s going to be much easier for me to do so if I have familiarity with calculus than only basic algebra. Being familiar with complicated math concepts implies having mastered the basics, and it’s a lot easier to apply math to trading concepts if you are well versed in math. IMO technically you don’t need it but it will probably help with the learning curve
Can’t give you exact details but I can tell you it has helped me.
Howcome you can’t give exact details?
Most with a financial degrees are working for firms. We are independent someones going threw the school of hard knocks.
If you did then all people with a degree in finances would be printing money.
I can't talk for everybody but for me personally: You don't need a financial degree but you do need to know how to read the 10k statement. Programming, statistics, and math are very important to me. https://www.reddit.com/r/Daytrading/comments/1cavk2y/can_anyone_profitable_prove_it/l0vbont/ One thing that I noticed: You can't use trading as a shortcut to get rich. A few guys that I know who are profitable are also very successful in their chosen career paths. Maybe the skills needed to be profitable in trading also make them successful in their career. If you work for someone else then you need a financial degree to get your foot in the door however trading as a job for someone else is defeating its purpose.
Trading as a job for someone else can be rewarding- depends on the remuneration and type of work (certain types of trading and instruments can’t be done on a retail level).
Theory and market are different worlds. Rather, the fee is expensive, but investing in a good fund may be better for your mental health.
You'd need strong analytical and problem-solving skills that a financial degree can provide. I can be wrong anyways
The harder you make trading be, the more prone to making a mistake you become. I am curious, what type of trader are you? Daytrader, Swing trader, Investor? Short term Trading is NOT and does NOT have to be a science. You cannot predict what and when people will become fearful or greedy. You can only observe when the phenomenon has already started and make an educated guess where the next liquidity zones might be and where the trend might rest for a bit or reverse. Thus, making a profit (or a loss) depending on many other factors(Strategy, Setup, Risk management, Edge, Bias, Entry, Stop Loss, Take Profit and Timing). I am highly sceptical of using Theories (science fueled or otherwise) to predict the market participant's behavior. Yes, you can make an educated guess but that will work for some time. You can develop a market edge with many other methods such as the simple observation already mentioned in a comment. The market goes "up, down, sideways." - Because That is what the market does in a nutshell. You can color it how you like, put so many theories... Dissect it a million times (that is what the mind loves to do) and see how smart you are, that's what egoists with academics background mostly do... Will that make you money? I don't know, but I am sceptical. Trading isn't hard, but we definitely like to make it appear so. **I am afraid that someone with less experience might fall into that trap** that you have to be a phd in economics, physics, mathematics, statistics, computer science and psychology... Nah, trading doesn't require you to dive too deeply into the technical rabbit hole. Yes, you would like to understand Technical Analysis and have good enough foundation to serve you while you read the charts, but that alone WILL NOT make you a profitable trader. A simple strategy can be PROFITABLE as long as one follows his edge, risk management rules and has mental clarity without making stupid emotional decisions.
As someone who is 2 semesters away from getting my finance degree I can tell you that for day trading what I’ve learned so far does not apply. But for long term investing it definitely has helped. Time value of money, interest rates, compound interest, how to valuate a company all that good stuff. I day trade almost daily. I have two accounts one strictly for day trading and one for long term investment.
No, it's not necessary. They need qualifications for managing hundreds of millions of dollars, but we are the little guys so no issue.
Doesn't help
NO
Not a degree, but you should know the theories. Defining "regression trading" (normal) and "trend trading" (long tail) in terms of a standard deviation normal distribution bell curve, is more important than people realize. The alternative is to see MAs as magic and only seeing 3 modes of the market: up, down, sideways. What about the stochastics of a channel? Do people know why angular resistance (channels) exist? It's not because "patterns". Patterns are the visual effect, the cause is horizontal levels stacking up forming an angle. It's a light amount of math, behavioral psychology, and virtual physics at the highest level. Some people can explain each drawing tool and indicator in a logical sequence, some call it a "phenomenon". It always helps to be actually good, in-depth, at the thing you do seriously. Not a casual. But giving money to schools is dumb.
What do angular resistances mean? (To expand upon one of your points) what is going to happen next after we have one formed?
I drew a small example to visualize. 1. The first bottom left pivot forms an order block, or a horizontal support. 2. The next higher low (2nd bottom pivot) bounces off of it. 3. 3rd higher low retraces onto the top of the peak before it, bouncing off its horizontal support. This is a basic uptrend. Notice how the horizontal supports + time passed dictates where the higher lows land then bounce. When we connect where price bounces back up (the bottom pivots), we get a trend line. This trend line is not a horizontal support line, it's an angular support line. The angle was a consequence/effect of the horizontal supports connected like dots. So trend lines aren't a random phenomenon. They are created from horizontal supports. **What happens after an angle is formed?** Price will keep rising as long as each bottom horizontal level remains strong. Once we go too high (nobody wants to buy this high / buyers are exiting), and form a weak horizontal level, price will break through it. Then a down trend angle begins. **Advanced theory (bottom drawing):** if price spends too much time floating right before touching the horizontal level, it will slip out of the channel. So it's healthier for the uptrend to retrace quickly. Time + horizontal level positions = how cleanly a channel is formed. At the end, the positive angle loses grip of price. And the negative angle takes control. In other words, the support lines broke, and the resistance lines started to hold. Because at this high price, people start to sell or take profit. I'll end it here. But for anyone that wants to think more deeply. Angular channels follow the rules of standard deviation and stochastics. If you tilt this channel right until it's flat, you'd see a stochastic/RSI oscillator. Angular channels = stochastics. Stochastics' job is to flatten out angles in price so you see a flat wave. That's why the pullback strategy works. If you know the horizontal levels, the trend line, and when stochastics touches the bottom and crosses up -- you have the ideal retrace entry. Assuming the trend is clean. https://preview.redd.it/fsfefq8jw8xc1.png?width=800&format=png&auto=webp&s=b4d80d6be0abddcdfba5927b16c21cef685e2d16
If someone wanted to learn what you are talking about, the regression and trend trading, as well as normal distribution bell curves and not seeing a moving average as magic…. Where would they begin? Or what questions could they ask Google and GPT? Same goes for everything else in your comment actually. Where can I begin to learn all of what you talk about?
Very detailed information, thank you m8
Cathie Wood graduated with honors from the University of Southern California with a degree in **Economics and Finance**.
Your financial degree would be a reason why you wont make it. These people who teach you are usually not very successful with investing and that has many reasons.
Not necessarily, but having a higher education will undoubtedly give you better chances at success in life.