My dream job is in trading. I would kill to work at a prop shop. Will there be jobs in 5 years? I’m going to college at a non target liberal arts. Right now I’m thinking I want to double major in Accounting and Economics. Any advice on the jobs or college majors would be much appreciated!
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Why trade stocks when you can trade STDs?
the people throwing MS at this are HIV positive
If you want to be a trader drop accounting ,major in math or comp sci and get really good at mental math & programming
Realistically, I’d say discretionary trading has 10-15 years left before it’s completely gone, and no one is going to get hired without a programming background
Trading is not dead at all. It's just that less people are taking all the inefficiencies. I'm still in the process with some prop shops but if you dont have a quant background or you're a 0.1% finance/economics student, you won't even get past their CV screening.
If you are really crazy about this stuff, I'd recommend following CS/math in college, playing tons of poker, keep your math sharp, be a socially chill dude, and play competitive video games.
Or... if you're lucky and you don't want to do all this crap... If you're a woman and you show some slight interest in trading in your final year at uni you'll probably get a place at a BB (sadly not even exaggerating).
Agree with the female part - it's getting lowkey ridiculous now.
Mostly applies to sales though. Could be blindfolded and if a chick tells me she works in sales at any US BB she in 95% of cases is a 9/10
Trading is dead as wood son
Wood drastically underestimates the impact of social distinctions predicated upon wealth, especially inherited wealth. You got that from Vickers, Work in Essex County, page 98, right? Yeah, I read that too. Were you gonna plagiarize the whole thing for us? Do you have any thoughts of your own on this matter?
Almost embarrassed to quote this, but it always stuck in my head...I would encourage you to read it if you have not already:
“After the markets closed Vinny would get into his Cadillac and drive out to his big house in Long Island. Now there is the guy called Vladimir who gets into his jet and flies to his estate in Aspen for the weekend. I used to worry a little about Vinny. Now I worry a lot about Vladimir.” ― Michael Lewis, Flash Boys
Moral of the story is focus on programming, math, probability. Accounting won't help at all. There are HFT guys who had zero finance background, solely programming, who are making more money than any trader at a BB.
For what it's worth, I work on a trading desk and the senior guys are on the phone almost everyday giving guys they came up with their condolences after they were let go.
trading is not dead...its just hard. There is less vibration in the markets vs 10 years ago....so being a market maker and trying to make the spread is no longer a profitable career.
Now, to be a trader, you have to take directional risk...you must synthesize all the information from the news feeds, combine that with the price action and "reading the tape" and then use your intuition, created from YEARS of studying the markets...to initiate a trade.
This is not easy, and the path is not short. Can you do it? Are you willing to put in the work and take the risk?
There is no more free money in trading....you must take risk..or don't bother.
disagree with this.
Is it possible to consistently make money as a discretionary trader? Yes of course it is, and I’ve done it for several years now. It’ll probably still be possible to make money 10 years from now, but that’s not the issue with trading as a career these days
The problem is that the sharpe ratio of discretionary trading is lower than other strategies, and the amount of capital allocated to discretionary trading is shrinking and shrinking with fewer and fewer seats
FWIW - this seems to be the case across highly liquid asset classes - equities, cash FX, IG credit, pass through/ TBAs in MBS... etc. Things like structured credit (CLOs, CDOs), HY Credit (distressed debt/leveraged loans), IG and HY Municipal bonds, and corporate derivatives are all very sought after desks that are still hiring young traders.
So is sell-side trading coming back to how it used to be? Probably not, but if you’re smart with the desk you pick (if you can), then you can have a great career in sell-side s&t.
Further - a general rule of thumb is the more liquidity there is, the more trading data points there are. The more trading data points, the easier it is to build a machine learning program that can figure out the expected value of that asset and price it accordingly. Notice all the desks I mentioned that are fine are the ones that have assets that trade once a day (some leveraged loans), once a week (some structured notes), and once every few months (some HY Municipal Bonds). How on earth would a computer find the price of a bond that hasn’t traded in 2 months? Bingo, that’s why you still need traders in those seats.
What people fail to understand, is that sales is so much important than is let on on WSO. When the traders have a ton of axes, it's up to the sales to understand who in their coverage is going to like what. Do they want to buy outright? Do they want to swap and pick a few BPS? Do they want to extend or shorter their duration exposure? At a BB, when you have a ton of clients, a good sales knows who wants what, and when. This makes both the client happy, since they're getting offered or bid on things they care about, while it also makes the trader happy since you're helping them move their axes. Win-Win. Booyah.
First, I'm curious as to how you know prop trading is your "dream job" and why specifically. It seems like you would have very little experience doing this, given you're supposed to be in school all day. But maybe you do.
Second, I know there are a lot of young kids on here giving advice to other young kids. In this case, I suspect it's happening again since a lot of people chimed in about "trading"yet are talking about totally different forms of trading. Market Making, Execution trading, Agency trading, etc. are not what this guy is asking about. He is asking about PROP trading. Prop trading is generally 1) discretionary shorter term/day trading mostly based off technicals, 2) some form of arbitrage pretty much using computers, or 3) a high frequency strategy basically front running retail trades and/or following trends or momentum and riding them.
The future is definitely in some sort of computer programming based, as the last 2 forms above indicate. You don't sound like a quantitative/programming guy at all. My guess is you want to be a discretionary trader. I'm sure people can still make money doing that. tehcnicals and charting works until it doesn't. Patterns can create opportunities but now that computers with AI and machine learning exist they are quickly taking that profit since you'll never be able to act as quick. There's always going to be someone that can find the next trick/chart pattern/technical analysis that makes money. Question is how much, for how long, and will anyone give you the money to trade vs the other strategies they can invest in.
So is it dead? No. Is it truly a relevant career anymore? Probably not and less so day by day. But again I ask myself if you've actually learned anything about what you claim your dream is. For one, I can tell you prop traders, and certainly talented programmers, are 99.99% of the time NOT the same folks who care about or can be successful in IB, yet that's your plan B.
You're a senior in high school! Take your time and figure out what you're good at, what type of learner you are, what your style of work you excel in, and what specific type of pressure you thrive in (if any at all)...… If you're a very intellectual/academic person who is very analytical and thorough with their work, nearly all forms of trading aren't for you. If you don't mind downtime and don't get frustrated when you don't have every minute filled, then maybe consider banking. If you don't like being put on the spot and asked to answer things with limited information, maybe trading isn't for you. This is what you need to learn about your own personality and style so you can find the right career path to thrive in.... not just chase a romaticized idea of a career, not just show up X days a week and power through each paycheck/bonus period.
Trading = provide liquidity, i.e. market making Liquidity -> Automate execution (kill flow execution) -> Tech / programming + infrastructure needed
'Prop' Trading = take liquidity to arbitrage information inefficiencies Information -> Speed up (tech better than people)
Is trading dying?
Better question - what is the maturity of the product (i.e. amount and distribution of market participants, fragmentation, technology and infrastructure, volume and size of transactions, volatility)?
This gives you a proper answer.
Anything on an exchange I don't see as needing a trader. Broker driven markets will need someone.