Q&A

Thanks for your interesting points. 

You’re right — the trading landscape has shifted massively in the past decade, and the lines between “quant” and “discretionary” are blurring almost everywhere.

I try to break your question into two parts:

1. Will banks shift toward more quantitative/systematic trading?

Short answer: Yes, but unevenly — and by desk.

What’s happening now:

Prop shops and HFTs have proven that data-driven, automated, and systematic approaches can dominate in liquid, short-horizon markets.

Banks’ market-making arms in highly electronic markets (e.g., FX spot, equity derivatives, treasuries) are already heavily quant-driven — often indistinguishable from prop shops in technology and staffing.

Risk, compliance, and capital rules (post-Volcker in the US, Basel III globally) have pushed banks away from high-risk prop-like discretionary trading, encouraging more scalable, model-driven approaches.

But it’s not all going quant:

Flow businesses — trading around client orders, providing liquidity in illiquid products, structuring solutions — still require human judgment, relationship management, and “gut feel” for the market.

Macro and credit often still rely on discretionary views — because some trades are based on political risk, event outcomes, or complex restructurings that aren’t easily modelable.

Volatility trading is a hybrid — quants build models for pricing/hedging, but senior traders often make the final call on skew, positioning, or event risk.

Likely future:

Junior hires will increasingly need quant literacy (Python, SQL, stats, basic ML), even for traditionally discretionary desks.

Pure “voice” trading will shrink; “quant-augmented discretionary” will become the norm — where traders have algos, analytics, and data pipelines at their fingertips.

True “gut feel” trading without data backing will survive mainly in illiquid or niche markets. 

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2. Who should (and shouldn’t) pursue trading?

Best fit for trading:

Resilient under uncertainty — can make decisions without perfect information and not freeze after a loss.

Analytical + adaptable — comfortable with numbers, probability, and rapid pattern recognition, but also willing to evolve strategies when the market changes.

Fast learning + iterative mindset — can process new data and adjust without ego.

Competitive, but not reckless — thrives under pressure without blowing up risk limits.

Collaborative enough — even prop traders work in teams now, especially for tech, research, and infrastructure.

People I’d dissuade:

Overly rigid thinkers — the market will constantly invalidate your “truths.”

People who can’t handle drawdowns — if losing money (even temporarily) wrecks your mental state, trading will eat you alive.

Purely creative types without quantitative comfort — the job increasingly demands data analysis, coding, and statistical reasoning, even for macro/Credit.