What is a stock trader?
A stock trader, otherwise known as a share trader, is an individual who invests money to gain capital by buying and selling shares of publicly held companies. A share represents a unit or fractional part of a company’s equity.
The share value fluctuates according to market forces – if more people buy than sell, demand will drive up prices and vice versa. It is possible for the actual value of the company and that represented by its stock market price to diverge.
This phenomenon is called volatility, and it means that investors can make (or lose) money very quickly depending on whether they trade with luck or judgment.
Three things that are required for trading stocks in the US:
A stock trading account
It is necessary to register with a brokerage house. These companies will generally charge around $7-10 per transaction but could be more or less depending on whether you make your trades through a branch or online and whether there are extra charges for research, special software, etc.
An investment strategy
You have to have an investment approach just as much as you have to have money – this is because investors cannot possibly study every single one of the thousands of public companies available. Mutual funds are often recommended for beginners as they allow you to pool your money with other investors and diversify your portfolio.
It is essential to remember what you can afford to lose. The US financial regulator FINRA highlights that 23% of traders who registered between February 2009 and February 2015 lost all their investment within just six months after trading began.
You could become a US stock trader in Japan.
- Decide whether day trading or long-term investing suits you best before beginning your training. It will help determine how much research time should be spent on each company and the kind of strategies needed for each trade placed.
- Develop a sound knowledge of how to read financial statements and reports, as the US Securities and Exchange Commission (SEC) rules state that these must be provided before an IPO or share launch. There are also guides available online on stock trading basics in general.
- Decide whether you want to trade stocks by yourself or join a company with multiple traders under one roof. Working for yourself is not for everyone, but some people prefer to set their hours. In contrast, others enjoy mentoring from managers who have experience in stock trading.
- Finally, it is essential to remember that trading places in Japan will have their own set of rules and regulations. Hence, it is necessary to investigate whether these are compatible with your own beliefs before committing to a company.
The closest thing to US dollars are J-Premium accounts offered by central banks in Japan, but even then, you can’t use them to buy or sell stocks outside of Japan without having a special license called J-REITA.
What is required?
The requirements for applying for a J-REITA license are not very strict. Anyone who wishes to open an account with JPY and purchase foreign stocks can do so, provided they have enough money to pay transaction fees every time they decide to make a trade. There are no minimum capitalization requirements so long as there’s enough money around to pay any expenses incurred while attempting to trade stocks.
What is the process?
The first step to receiving your J-REITA license is finding a broker to help you with your transaction needs. They will provide you with all of your account numbers and passwords, which you will need to make trades through their system. You may also fill out some online forms if available for customers not living in Japan.
As you have no doubt found out by now, becoming a US stock trader in Japan is not very different from wanting to buy US stocks from anywhere else so long as you have the money to pay the fees, which are usually a percentage of your capitalization. The J-REITA license simplifies any paperwork involved in joining an online brokerage service using JPY only.