How to become a FX Trader at Major Banks?
Hello Everyone,
If anyone has interned or worked (or have thorough understanding of) at FX trading desk, then please help me out!
In order to get a summer internship or apply for the full time at FX trading desk(of course as a trader) would I need to have strong background in math and financial engineering(or complex derivatives)?
I've always wanted to become a FX trader at major banks, but it's really hard to get informations on how to prepare for this job...so please help me out guys!
Also, what are other skill-sets that I need to have in this field?
*I have been following the FX Market for over 2 yrs and have strong understanding on technical analysis
do a one year stint at Travelex at LAX than apply to the big banks. you'll get a lot of international and "hands on" experience.
I've asked that same question about trading a hundred times jjy, and the answer I seem to be getting is no, especially not for FX
jjy, the very last sentence of your post told me essentially all i needed to know. But before I continue, correct me if im wrong , fair?
In your 2 years following the FX markets, you've developed a strong understanding of "technical analysis", particularly indicators such as: Moving Averages/MACD, stochastics, RSI, Bollinger Bands, Fibonacci, etc.
Once you've given me a definitive answer on what your 2-year knowledge base consists of, I'll continue with my answer to your original question
Dear FXTrader,
Yes, you are right on the point! I've tried to learn the price movement by applying basically what you've listed on your post(Moving Averages/MACD, stochastics, RSI, Bollinger Bands, Fibonacci, etc.) And, this brings up another question that do actual FX traders at banks use these methods? or do they focus on whatever their clients ask for?
Thanks for quick reply!
I feared you'd say that,
here's the thing, those tools are used heavily for SPOT FX trading, finding support, resistance, etc. To be hired as an FX trader at a "major bank", you really don't want to use SPOT FX expertise as your talking point, those guys are a dime-a-dozen and there's no real way to differentiate yourself.
Remember, spot FX is sooooo competitive that very little money is made through client deal flow. The "real" money on FX trading desks are through exotic options (barriers, digitals, asians) and proprietary index products these banks create (for example: db.com/dbiqweb2/index/DBIQ_ImpAct_FX_Volatility_Index">https://index.db.com/dbiqweb2/index/DBIQ_ImpAct_FX_Volatility_Index)
Become a pro on these products and then you'll start turning heads.
As to whether or not banks use these tools, sure some spot fx guys may use them for prop trades, but even proprietary spot FX is not a big revenue generator for these guys (options and structured products lead the way across the board).
Out of curiosity what do type of FX trading do you do and where?
I agree with FX Trader. First of all, understand that FX Derivatives trading is more about vol, and in the case of flow exotics (as mentioned above, barriers, KOs, RKOs, etc) about deciding which of your risks to hedge and which to leave unhedged. If you are really into spot FX, then this might not be as interesting to you. Compared to spot, it is a lot more analytical and complex. Most of the people on the desk have some sort of math background, including 2 MFEs and 1 PHD. It's not necessary to be a math expert, but its helpful from a recruiting standpoint. It also helps you to pick up concepts like the greeks and how the smile is built if you are familiar with a little mid/upper level math imo.
By the way, Spot FX traders at banks definitely do use some TA. It depends on the trader, but I know many do. The issue, as alluded to before, is that Spot FX is so liquid, that margins are low. Electronic trading is really taking over in this area. It's not going to be dead in the next few years imo, but in the long term it will likely continue to shrink.
If you have other questions about any of this or the products involved, definitely just reply. One or both of us can probably answer any questions you have.
Foreign Exchange - Landing on a major forex desk (Originally Posted: 08/06/2013)
Hi Guys,
I'm going to make this short and simple. I want to land on a major forex desk and really learn how the markets move and where the big money is made. Plan B is fixed income trading.
I've been trading on my own (both demo and live) and have been doing really well, although borderline cowboy. I am adjusting my trading style to be more systematic and less risky.
Rising sophomore at a non-target Boston area school, interned at a big middle eastern prop desk (biggest in the middle east) and did real work there this summer (end of freshman year), and had 2 IB internships before that (both in the middle east).
What should I target for my sophomore year internship? junior year internship? and finally, 6 month co-op would best be at said major forex desk.
Note that I am not a US citizen, if that will affect my chances in anyway.
Being a non-US citizen will affect your chances because some internships will be exclusively for permanent US residents (mainly a concern for your suophomore year internship). I think you should just target forex desks at whatever company you are interested in working with and the same for your junior year (assuming you are set on forex).
I think it will be rather easy for you to get something given your experience. Since you are in Boston, you have a great opportunity of meeting up with people and having informal interviews.
Good luck!
Hi KingHongKong
Should I just go ahead and try to get on the phone with as many BB forex desks as I can, and make the visa issue pop up later on?
Or maybe London is the other option? I know that the british are more flexible with work visas, and London is a bigger fx space overall. Please keep in mind that my sophomore will have to start in the end of June (will have to take at least 1 summer session every summer until I graduate if i want to graduate with a double major in engineering & economics), as opposed to the end of May as most internships do. Will this cause me any hassle?
I was in your shoes in many ways (completed hs in Dubai, started FX trading during freshman year, completed an internship at an equities prop desk at a boutique freshman summer), but now focus on quant macro and never needed visa due to citizenship. Getting on a spot FX desk without visa is going to very difficult and I'm sure you didn't need me to tell u that. When you factor in the role of eFX, I would say close to impossible unless you want to be a programmer. I can only say that just like trading, the future is uncertain and unforseeable, so your best bet is to be nimble and keep your options open while having your mind set on a broader goal that you iteratively optimize towards. You could try to land a gig at the FX prop desk of one of the major oil firms, but I think they're all based in London opposed to MENA, so you can probably cross that out coming from a non target.
I forgot to say that my prop trading internship revolved mostly around corporate (investment grade only) and sovereign debt, but most of my personal work was in sovereign debt. Then again I can still spin the sovereign part into forex (Im sure you can see how that would help in fundamental analysis). Is the citizenship situation sticky for all trading or just forex in particular?? I know it's a dumb question, but it just seems like everyone is mentioning the difficulty with forex spot trading in particular. As in would it be equally challenging if I tried to jump towards a PE internship to diversify my exposure, for example?
What if I went the asset management or still even in the forex route and looked for a desk in London? I'm sure they're much easier with work visas than the US.
Thanks!
How about trying to apply in London, considering it's the centre of FX?
It's probably much easier visa wise. Any suggestions for shops that I could really learn from?
Never talk about the visa issue in an informal interview/first contact unless it comes up (which it probably will). You just have to start dailing now.
I am not sure where you heard that the UK is more flexible with visas. I am not sure that this is true. The time frame won't case any problem. BBs are rather flexible when it comes to that (once you got the position).
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