Tips About Commodity Trading Careers
September 12, 2016
Commodity trading is a fantastic career for top graduates and professionals. Not for the light-hearted, trading requires commercial skill and an analytic mindset. The key to success is a great understanding of the supply chain and physical flow. Do you have what it takes to become a top trader? Learn with tips about commodity trading careers.
Tips about Commodity Trading Careers
Commodity trading careers: an amazing career path for top-notch profiles
Commodity trading is an extraordinary career path; a genuinely complex profession that traces its origins to ancient times and trading routes.
Commodities trading is one of the most challenging, dynamic, and rewarding careers still available in the corporate jungle.
Good at numbers, good at people
The best commodity traders are very quick, driven individuals with excellent people skills.
They’ll need sharp commercial skills and a strategic mindset capable of solving unexpected complex problems and make hard decisions.
Start young – try to survive
Typically careers in the industry begin in the mid twenties, and hold strong as long as you enjoy the markets and make money.
The first years on the job tend to focus on the operational side of the business, since a developing trader needs to learn about the physical trading flows before taking commercial decisions.
Progress as a trader & make money
Candidates who show a good eye for business and a smooth understanding of the markets will quickly progress to more senior commercial roles.
Commodity trading salaries tend to be highly competitive and working hours are rather acceptable. But there is no free lunch, you’ll have to fight and earn your pay-check.
A commodity trading career is a long-term project.
One of the best tips about commodity trading careers I can give you is to keep a long term view in mind.
Commodities trading is about surviving
Over the course of his trading career, a commodities professional will gain a deep understanding of his product / market, as well as a tight network of industry contacts. Industry knowledge and contacts are the key.
Industry insiders become more valuable year after year. In this sector trading experience and knowledge about the products you trade are vital human capital to succeed.
Commodity traders are market experts
Compared to investment banking, accountants, or marketing people, commodity traders require a much deeper understanding of the industry, supply chain, market dynamics, stakeholders, and products
Commodity traders make more money than they lose. They leverage their experience and contacts to take the best decision under any circumstances.
Traders are thus extremely valuable to their companies – they are highly knowledgeable, expensive to train and hard to replace.
What does it take to be a successful trader?
Successful commodity traders are quick analytical thinkers, good decision makers, socially smart, strategical movers, and a commercially driven person.
Additionally you’ll have to be really good at multitasking and capable of setting priorities. Can you organise your time well while you handle the stress of the markets?
How difficult is to get a trading job?
Commodity traders are highly specialised professionals. Traders are hence very scarce and highly valuable to a company – as long as they achieve profit targets.
There are usually only a few hundred traders worldwide who specialise in a given commodity. It’s relatively rare to switch to a new commodity, say from coffee to crude oil trading.
Most traders specialise on a specific product and region.
It takes years to learn how to trade commodities. Hence there are much fewer openings per year than in other fields such as accounting or consulting.
The labor market for commodity traders is tight. It’s difficult to break in, but job safety is good as long as you can trade successfully.
How long does it take to become a commodity trader?
Becoming a trader takes somewhere between 3 and 6 years.
Most traders start as trading trainees or trading operators. There is no shortcut to becoming Mark Rich, you need exposure to physical operations and years of market experience.
Depending on the company, you might be able to jump, say, from Trainee to Trading Assistant, or to start as Trading operator and jump directly as Trader (or Junior trader).
It is very rare to start in a trading desk as a Junior Trader without having done a good 2-3 years of operations and trade support.
Some companies such as Trafigura run excellent accelerated trading trainee programs, which speed up the process of becoming a commodities trader.
Trading Career Progression
As said, becoming a commodities trader is a long term project. What can you expect?
Do you want to be a commodity trader?
The most common career path for traders is:
- Trading Trainee (from 6 months to 2-3 years)
- Trading Support (from a few months to a few years)
- Trading Operator / Financial operator (1-3 years)
- Trader Assistant (1-3 years)
- Junior Trader or Assistant Trader (1-3 years)
- Trader (3-5 years)
- Senior trader
- Head trader
Those with a great understanding of supply & demand, operations, and sales will develop faster.
Becoming a trader without experience in commodities:
It’s relatively difficult to break in the world of commodity traders without previous experience.
Trading companies often recruit directly through their network of contacts. Trust is paramount, and thus most trading desks recruit former customers suppliers. Experienced traders are head-hunted on a regular basis.
Only bigger trading houses such as Trafigura, Cargill, or Shell recruit top graduates from leading universities.
Becoming a trader with experience in commodities:
Do you already have some trading or operations experience? It will be much easier to find your way towards a job as a commodity trader.
Commodities professionals are sought-after, and usually keep a close relation with head-hunting firms such as Selby Jennings.
Conclusion & Next Steps
Do you want to become a commodity trader? Start learning about markets asap. Nowadays it’s clearly easier if you know how to code.
Once you are familiar with the application process, find your target trading houses in our recruiting links.