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CTA - Series 3, Series 7, Series 9, Series 10, Series 56 NASD exams certifications
Does somebody know if they bother to audit CTAs residing in foreign countries to the same extent ? (it seems there are registered CTAs from Europe on this forum). Thank you
Correct me if I'm wrong, I believe it's worth for a 2 years period.
Can you help answer these questions from other members on NexusFi?
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
Here are my thoughts on obtaining FINRA licenses and other designations with regards to the importance of trading and your overall goal with learning, improving your trading and the potential career outcomes.
The licenses mentioned here of series 3, 7, 9 & 10 are all great in completing however it really comes down to what you're looking to get out of them. The series 3 and 7 are required if you would like to become a broker for clients. The series 3 is commodities/futures brokering specifically while the series 7 plays more into all other asset classes such as stocks, bonds, options, warrants, mutual funds, etc. They do intertwine on a few things but these licenses should only be obtained if you're looking to manage money for other people. For example, you'd like to become a Commodities Trading Advisor (CTA). There are a number of other related licenses you can and most likely need to obtain as well such as the series 63, 65 (or 66), 31, etc. The series 9 and 10 are for those who would like to become a manager of brokers or to have your own firm (even if you aren't managing anyone). These are required for compliance, etc. and require you to already have the series 7.
Having FINRA licenses can be a plus and minus and it really comes down to what you're looking to benefit out of them. If you want to manage other people's money (OPM), this is just a requirement for entry but it comes with a lot of red tape. If you're just looking to expand your knowledge, they can be helpful but there other, better ways to go about this. Additionally, you'll need to be sponsored by a member firm to obtain access to the licenses and must remain with one to keep them active. Starting your own firm can satisfy that as well but that's a different story there.
In addition to the standard licenses mentioned here, there are a number of professional designations one can obtain to truly expand their knowledge of the markets and investment management. Like the licenses, these designations require an educational minimum and industry experience/alignment. Again, it just depends on what you're looking to do with these designations to determine which one's make the most sense if any. The three that come to mind as being the most popular are the Chartered Financial Analyst (CFA), the Chartered Market Technician (CMT) and the Chartered Alternative Investment Analyst (CAIA). These designations can open all kinds of doors for you in your professional career. It just depends on what you're looking to do. All are very informative and extremely difficult to obtain (especially the CFA) and many people look to obtain all of these designations.
The CFA designation is the most recognized and prestigious designation one can obtain in the financial world (in addition to an MBA of course). This designation is renowned for being extremely difficult to obtain because of the level and depth of the curriculum a CFA candidate needs to learn and pass the exams. There are three levels one has to get through to earn the designation and they require hours upon hours of studying. In other words, it's a huge commitment and you'd better be sure this is worth your while. The CFA is very broad in the areas that are covered which range from Ethics, Investment Tools, Asset Classes and Portfolio Management. This designation is basically essential in obtaining if you want to become a portfolio manager or an analyst. As for it's pertinence in day-to-day trading, I don't see there being a massive impact. The CFA covers technical analysis but the focus is traditional portfolio management and long(er) term investing. Once the designation is obtained, you need to remain in the financial field and be aligned with a firm while adhering to their code of ethics, and are "encouraged" to take continuing education, pay your annual dues, etc. So, in summary, the CFA is as good as it gets if you plan to be a fund manager or manage pension assets or become an analyst of some sort. The benefit for the day to day trader is somewhat limited.
The Chartered Market Technician ( CMT) is perhaps the most beneficial designation one could obtain with regards to trading. This program like the designation states, is designed to confirm the proficiency one has in technical analysis. The program is designed similar to the CFA by having three levels of learning and is nearly as difficult in obtaining and is growing in recognition and popularity world wide. The knowledge base a CMT candidate needs to learn is very specific and really dives into the basics of TA and builds upon that to very highly technical TA methods. Having this designation will again, open doors for you in the money management world and plays more into the alternative investments side such as hedge funds and managed futures funds. If you don't plan to go through the grueling exams but are still interested in the knowledge obtained from this program, I highly recommend learning the course work anyway.
The last designation I mentioned is the Chartered Alternative Investments Analyst designation ( CAIA). This designation is typically used in addition to another designation such as the CFA. The program is to confirm the designee's knowledge in the world of Alternative Investments such as Hedge Funds, Hedge Fund of Funds, Private Equity, Managed Futures and Commodity Pools, Derivatives and Structured Products and of course, Ethics. This program is the easiest to obtain IMO, and is geared for those who are already in the money management field that would like to further enhance their knowledge. There are two levels to the learning process which cover portfolio management, risk management, ethics, due diligence, etc. and really cater to the portfolio/fund manager. This designation although extremely interesting wouldn't be a huge impact if you're looking to just be a trader. If you have ambitions of starting your own hedge fund or looking to join a firm that provides alternative investments to it's clients, then this designation would suit you well. Also, this designation is typically paired with the Certified Investment Management Analyst ( CIMA) designation which is very popular with Financial Advisors/Consultants. But that's another story and has very little to do with trading.
But beyond the potential ways to gain expanded knowledge on the markets, trading and investing. The best source of knowledge and experience comes from real life application. I guess the question then becomes, are you better off coming into trading from a previous career as say a middle management executive or a well informed financial professional? I'll choose the later on that one. My experience in the money management world provided a good transition into managing money for my own behalf. It's up to you to decide of course.
What about you? Do you have these certs or feel inclined to get them as a personal trader, a "manager of (your own) private hedge fund"? I know you used to manage OPM, but what about today's goals?
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
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I had the designations which were a great accomplishment at the time but I haven't kept them current. As an independent trader, they are no longer necessary to have as I work for myself vs. a company. I'm done with that world but greatly appreciate the knowledge I obtained when I was there. My goals for trading are far different than what my goals were in the portfolio management world.
I would encourage anyone that is looking to further expand their knowledge to consider any of these designations but would put more weight on the CMT designation with regards to it's usefulness in trading. Also, they require that you are aligned with a firm and have a minimum amount of experience in the investment field. So, it's kind've a tough one there if you aren't in the business. But like I mentioned earlier, the course work alone is worth learning even if you aren't going through with the exams. As for the FINRA licenses, you again would need to be at least sponsored by a financial firm to gain access but could open some doors if you are interested in going down that route. I guess at the end of the day, it just depends on what you're looking to accomplish.
Speaking of course work, do you recommend any specific set of books for this material and exams? Any online courses? Like you said, just studying the material would be beneficial even if you don't take the exam itself officially.
Broker: Advantage, Trading Technologies, OptionsCity, IQ Feed
Trading: CL, NG
Posts: 1,038 since Jul 2010
Thanks Given: 1,713
Thanks Received: 3,863
Absolutely, I've attached the current CMT recommended reading list. These books should all be available on Amazon. Additionally, here is a quick reference website for CMT candidates but I believe anyone can access it. There is a ton of information on this site and encourage people interested in the program to read it through.
Yes, I have used that reading list for my own education, at least partly ....
In particular, the books
Constance Brown: Technical Analysis for the Trading Professional
Perry J. Kaufman: New Trading Systems and Methods
John J. Murphy: Intermarket Analysis
Chris Wilkinson: Technically Speaking
I just want to add the Investment Management Certificate (IMC). It's by the CFA Society of the UK, and, combined with CFA Level I, it gives right to offer investment advice. I wanted to do the CFA a few years back, but, since I never went to university, I didn't meet the requirements. I did work through some of the Schwezer material ( CFA Exam Prep for the CFA Exams - Schweser.com), and I found it pretty good.
I also took the prep course from 7city Learning (the same company that delivers the CQF) ( Courses - IMC - Investment Management Certificate). It's divided into two parts: Investment Environment and Investment Practice. The latter is pretty interesting. The also offer CFA prep, but I haven't done it yet.
All of this is more for analysts, of course, it's not really relevant to daytrading.
I've never understood why people waste so much money on different courses from sneaky vendors -- when you can get access to a wide variety of webcasts and videos from the MTA for $300 a year ($75 for students).
That being said, I think most of TA is hogwash, but I have a strange fascination for it.
I just sat for the series 3 last week. I used the exam prep course from Kaplan. Scored an 87% on market knowledge and 85% on regulatory section. So I guess Kaplans program works.in my opinion the on demand classes were worthless, I wouldn't recommend paying extra for them. The text book and online quizzes are all you need. Remember you need to pass both mkt knowledge and regulations individually so don't get too comfortable if your quizzing well on mkt knowledge. The regulatory section is very dry but you better know it inside and out. I'd suggest using 90% as a preparedness benchmark on the practice exams.
