"Why Do You Want to Be a Trader?"

As I've mentioned in my Q&A, I've interned at a BB in fixed income S&T, worked full time at a BB in equities S&T, and am now a prop trader. During my career, I've encountered this particular question in almost all of my interviews, and a good answer was required for me to move forward in the hiring process. My answer has changed as my view on the trading industry has changed, and even now it's changing everyday as I learn about how diverse the business is.

I want to use this post to open up the floor to the rest of you. Pretend it's an interview and you're asked this question. How would you answer it? I will provide unsolicited feedback where I see fit but honestly, I just want to discuss this topic in general.

So whether you're an aspiring trader still in school, a professional who wants to move into trading, or a troll who wants to be fed, please answer this question: "Why do you want to be a trader?"

Why Be A Trader on Wall Street?

The reasons to want to be a trader on Wall Street are numerous and our users shared their different reasons below.

Some of the key reasons highlighted by our users include:

  • Meritocracy
  • Love of the markets
  • Fast paced work environment
  • Enjoy taking risk

in the flesh:
I want to be a trader because I am good at separating my emotions from evaluating risk--the best traders are the ones who are able to objectively know when to add to or exit a position during the trading day. I also tend to work best in a fast-paced, very quantitative and collaborative environment.

andres17:
The real reason I want to be a trader is because I enjoy following the market, and the job is the closest thing to a meritocracy out there. I like the idea of having my contribution to the company out there, and being paid for it, as opposed to going through a performance evaluation each year in which you don't have much say.

kbone:
Because so much of life is based on perception rather than reality, trading is a rare exception. You put your money where your mouth is, and if you're right you win, if not you lose. And no amount of politicking/salesmanship/or other BS will change that. You can't convince the market you're right, it is the ultimate arbiter.

HORUS:
I want to be a trader because I relish the chance to be challenged by the unpredictable every day of the week. Being able to take on risk, implement my own strategies and be rewarded for the money I bring into a firm is only a small part of my decision to become a trader. The real reason is because like (insert sport/activity...for me its poker) its the kind of thing that once I get started I'll always be hungry for more.

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Best Response

If I'm doing the hiring, I think a very strong answer would go something like:

"I want to be a trader because I am good at separating my emotions from evaluating risk--the best traders are the ones who are able to objectively know when to add to or exit a position during the trading day. I also tend to work best in a fast-paced, very quantitative and collaborative environment."

Metal. Music. Life. www.headofmetal.com
 
In The Flesh:

If I'm doing the hiring, I think a very strong answer would go something like:

"I want to be a trader because I am good at separating my emotions from evaluating risk--the best traders are the ones who are able to objectively know when to add to or exit a position during the trading day. I also tend to work best in a fast-paced, very quantitative and collaborative environment."

I like this answer too. However, I would wonder how a college student (that's my assumption here, would be different if the person was an experienced hire) would know that he/she works best in such an environment. If the person wasn't an engineer/programmer (and even then, is their schoolwork really "fast-paced"? maybe if they procrastinate lol), I would be pretty skeptical.

 

Well obviously they would have some stories prepared about times where they made rational decisions under pressure, can crunch large numbers in their head, can make decisions quickly with incomplete information, and played well on a team. They do still hire a lot of athletes other very competitive people, although the quants are always valuable.

Metal. Music. Life. www.headofmetal.com
 

Because I read Liar's Poker and have trained all my life to be a BSD.

But really, trading seems to be the one area in finance that I actually have the least interest in. This is based mainly on things I've read in books and here on WSO...can't quite put my finger on why, though.

 
Jake Flash:

Because I read Liar's Poker and have trained all my life to be a BSD.

But really, trading seems to be the one area in finance that I actually have the least interest in. This is based mainly on things I've read in books and here on WSO...can't quite put my finger on why, though.

WSO doesn't have the best skew toward trading in general since it has always felt more banking-heavy...but I think that can change for the better.

 

You have to be really confident about your trading skills during application process. I would always get asked on my best strategy and had to prove it actually works with examples of application.

 
Beny23:

You have to be really confident about your trading skills during application process. I would always get asked on my best strategy and had to prove it actually works with examples of application.

Wait since when? At what firms? Out of all of my trading interviews (including the offers I've gotten), I've never been asked about specific trading strategies past "tell me about a trade you did." My answer to that was always "I don't have that much capital so I haven't been able to do much besides buying some options based on speculation since transaction costs are so high" and it never hurt me to say that.

 

The real reason I want to be a trader is because I enjoy following the market, and the job is the closest thing to a meritocracy out there. I like the idea of having my contribution to the company out there, and being paid for it, as opposed to going through a performance evaluation each year in which you don't have much say. But I'm guessing I can't say this to an interviewer, right peyo?

 

Because it reminds me of what high-intensity athletics is: Lots of responsibility, and with that responsibility; lots of potential for a true feeling of accomplishment.

Only those who will risk going too far can possibly find out how far one can go - T.S. Eliot See my WSO Blog
 

Agreed with the above.

Because I can point to a number and say that's me, no politics. Because it's interesting. Because it pays better than other alternatives.

 
Finbias:

Agreed with the above.

Because I can point to a number and say that's me, no politics. Because it's interesting. Because it pays better than other alternatives.

This point and a lot of the other similar points above make a lot of sense. However, what if the trading firm has more of a teamwork culture/dynamic, and it's often difficult to point at a number and say who was responsible? What do you guys think? Would you want to work for a firm like this? I've interviewed with a couple of places with this kind of culture and you can tell that kind of answer to the question wouldn't fly there.

 

I want be a trader because I love the freedom of being my own boss with a high thresh old of risk and is very competitive not to lose but knowing losing is part of the game ....

 

I want to be a trader because I relish the chance to be challenged by the unpredictable every day of the week. Being able to take on risk, implement my own strategies and be rewarded for the money I bring into a firm is only a small part of my decision to become a trader. The real reason is because like (insert sport/activity...for me its poker) its the kind of thing that once I get started I'll always be hungry for more.

Keep it together and you will go far..
 

Desk got a kick out of this. Funny/Sad part is I've heard some of these things before hahah

Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
 

haha, that was brilliant.

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 
monkeysama:
I thought it was self congratulating and humorless. But then again, maybe I just have taste.

Obviously you are not a golfer

Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
 

I love to make money and next to having sex nothing is greater than the competition that trading offers. I thrive off of it.

Please don't make me talk to you like an asshole...
 

I just used that many periods for you guys to fill in the security type that you are (professionally) trading. Professional ...... trader. So, professional stock trader / professional bond trader / professional derivative trader, etc. etc. And yes most of the persons around here like the game and the challenge (so do I ;-)).

So for example you are a (professional) stock trader. What was your reason(s) to become a stock trader and not a bond or derivatives trader? Thus, I am interested in the reasons why you became a trader in a particular type of security and not another type of security? For example, did you become a (professional) stock trader because of the dividend received?

 

...Gotcha

I became a pro futures(macro) trader because I enjoy the leverage. It's high stakes poker in my eyes. I also think stocks do not offer enough transparency. It is nothing more than alchemy on a balance sheet.

Please don't make me talk to you like an asshole...
 

lol. Read the response, it wasn't me that wrote it - don't trip just because you write poorly constructed sentences and don't even know who to attribute responses to.

http://ayainsight.co/ Curating the best advice and making it actionable.
 

Come on guys. Although the messages are funny to read, it is going completely off-topic.

So are there any persons on this forum who can seriously answer my question? (no offense to these fellows).

 

Many professional traders got into trading because they are truely passionate about the markets and they truely love what they do. Pretty much everyone in high finance in the front office are totally passionate about their jobs, even if they hate the job they have or are only in it for the exit ops. If trading is what you want to do you have to make sure you this is what you want to do, if you want the exit ops IB is usually a better career course.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 
heister:
Many professional traders got into trading because they are truely passionate about the markets and they truely love what they do. Pretty much everyone in high finance in the front office are totally passionate about their jobs, even if they hate the job they have or are only in it for the exit ops. If trading is what you want to do you have to make sure you this is what you want to do, if you want the exit ops IB is usually a better career course.

"pretty much everyone" could you give me a source on this... considering just on this website alone analysts which are FO can't stand their jobs

The answer to your question is 1) network 2) get involved 3) beef up your resume 4) repeat -happypantsmcgee WSO is not your personal search function.
 

A lot of your answers seem to much more applicable to a question like "what are your strengths" or "what makes a successful trader." I think an interviewer would see right through your answers, you really need to develop a 'story' of sorts.

Dig a little deeper: why are you passionate about the markets? Do you like following world events and news? You could talk about how events filter into the market and how certain stories effect certain assets and that you like the opportunity trading provides to take views on certain things like a referendum or a port blockade in Lybia. This is a pretty hack example but you get my point.

Anyone can pull out a list of bullets like you have, but fewer candidates will actually go into detail and explain their reasoning. Saying you enjoy trading a mock account doesn't really relate to why you want to be a trader as the reality of the two are very very different. I certainly think talking about a mock account can be a great way to explain the trading 'spark' of interest but you need to dig deeper and be honest with yourself. Why do you want to be a trader?

 

Yeah no worries. I'm no expert, but in my experience it seems like this question is very person, it's kind of like "tell me about yourself." There's no right answer, they just want to learn a little bit about why you're there. If they were asking for "what skills does a trader need" or "how will you succeed at this job" or "what will you bring" etc, then they want to see that you understand the kind of stuff you listed in your original post. But the "why do you want to be a trader" is very personal.

You could talk about psychology, and how even though studies show that some traders are only right 50% of the time, you find it fascinating how the discipline and trader mentality wins out through the ability to cut losses, accept when you're wrong, build a position etc. I would also considering talking about certain books you read and why you liked them (reminiscenes of a stock operator, etc.).

There's definitely no harm in identifying your strengths: "Beause of my competitive sports experience etc and my time doing X and Y, I feel like I would be a great fit for the trading floor and my experiences have lead me to gravitate towards the fast paced, fast thinking nature of trading." But recognize that anyone can match experiences and skills with "fast paced, etc." but this is an opportunity to let the interview get to know you and your interests which is crucial because at the end of the day, they're going to pick who they like and who will fit well, if you're in the final round interview, you're probably good enough technically.

 

Agree with the poster above. You've mentioned strengths. Also be aware if you confidently say good with numbers etc be ready to answer questions accordingly on the spot with responses expected in a few seconds.

In my first year at uni a trader asked me why I wanted to be a trader. This was something informal and quite unexpected so I was a bit intimidated.

Below is my pathetic reply from a few years back but the trader really liked it and I'm still in touch with. Now I think it's way too cheesy but it's the truth haha

Trading gives me the opportunity to do something that seems so simple and effortless. In essence, all you do is buy something cheap and sell it at a higher price to make a profit.

While in college I read more about investment banking and realised that it is perhaps one of the very few industries where fresh graduates are given so much more responsibilities. And most importantly trading gives an opportunity to add tangible value that can affect the P&L of the bank.

After graduating high school because money was tight I kept working during the day and college at night and quite liked it because making money to support myself made me feel good from within. It was intense but I thrived on it and it made be a better man and humble as well; it taught me you have to work hard and not just smart to make money. It was a challenging situation to balance everything but I did it successfully and also secured a scholarship to uni. I wasn't exceptional at anything and missed out on sports at competitive level although I was good at a few; my timetable didn't allow me to practice 6-7 hours a day that's required. So I can tell you that you won't be seeing me at any Olympics or equivalent events. I've accepted that defeat and decided to move on. Going back to that point where I talked about trading being EASY and simply buying something cheap and selling for higher to make a profit, let me elaborate a bit on that. If you listen to concert level classical music, a solo, as a person who doesn't understand classical music, it is only some tune that 'sounds good'. You see, there is hardly any appreciation from the listener. The artist probably has spent 20 years+ and still working to improve his skills, hardly gets noticed when walking on the high street compared to some wardrobe malfunction silver screen celebrity. He or she has to keep working on skills and practicing to stay on top of their game, it's hard, it's really hard to do that for your career. Trading is similar, most people (management) care about your P/L at the end of the year, broadly speaking. You walk on the street and no one notices you. You could be replaced by technology or someone smarter at some point. Most people won't understand that your job is not limited by hours, you could have a few nights of disturbed sleep with your risk on books. Most of your family and friends outside of industry will think you are a stock trader even if you do structured credit. Many will look down on you if you don't make top money in terms of P/L. They won't really think you have managed to preserve capital and at least break even which is one of the most important aspects of risk management and trading. This also kind of links with my college days when it was a do or die situation and I did well. A situation where my boat could sink anytime but I had the stomach to take risk keeping in mind the reward it would present and keep carrying on. Today, I am standing in front of you having a drink. I never thought I'd get to see someone like you but I did it and I know if I keep working hard I can be a good trader as well.

That's my answer in short but hey I am also up to date with markets and can also pitch a couple of stocks if you wish. I kinda find numbers interesting and I am a desk person as well. But at the same time I do like speaking with people and discussing ideas and adding value which makes me a team player. So it's best of all words for me you see.

 

I think just saying money, power and respect is a bit vague. I wonder how many traders really make big money, are powerful and respected. If you are looking at a limited population and subsets then it makes sense but not otherwise.

I can think of tons of examples where even money can't get you too far. A very material example could be membership to some elite members by invitation only club. Or knowing that your kid will get into school (could be high school for all you know) on merit but your name will be enough to get them in without a donation just in case if they don't score well (that's power)

Walking down the road and seeing people waiving at you because your influence and contacts helped solve a murder case of a little girl (that's respect).

Have always believed how cool it is to have money, power and respect independent of each other.

Most traders are dreaming of making money first.

But then again, GoodBread, I've thoroughly enjoyed your posts and I'm not going to push this hard but come on, even you know money, power and respect is more like a funny answer to a serious question in an interview unless really backed up properly.

 

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