Ask Me Anything - Current Prop Trader/Advice for people wanting to make it/Breaking in

So I wanted to give some people hope. I will keep my firm names anonymous, but I want to give people help. I am just going to have some random points, and want people to ask anything or even state if you disagree so we can get a nice discussion going.

My Profile: I graduated in 2011 with a technology degree and economics degree from a non-target school (NYC area). I graduated with less than a 3.0.

My Career Progression:

1st Year Operations BB Bank - Automated my job -> Promoted to group of my choice (Couldn't land IB, and glad I never did it (hours insane and pay is better on buy-side - if your good) - but IB is still a good place to start though if you can break in. I chose the internal hedge fund - which was disbanded in 2013 from Dodd-Frank)
2nd Year - Hedge Fund Technology - Hybrid role doing algorithms and some software development. I also failed CFA Level 1. Never studied for it again, due to time.
3rd Year - Consulting for Private Equity Software (Client facing sales/software financial modeling development). Quit due to hours,politics, and outdated technology.
Current- Landed a job at a prop shop (Options/FX swing trading), and will be waiting tables at night (steady income as I build my trading business and transition to a hedge fund portfolio manager)
Long term plan - start my own hedge fund. Been building a custom machine learning system with 2 developers for 3 years. I have people that will invest - but I want to gain experience at the prop firm, and obtain my Series 65.

Is the CFA Worth It?

CFA level 3 passing will potentially help you move from operations to a client facing role within prime brokerage (assuming you are not in operations >2 years). A fellow co-worker did just that, but you really need to have your foot in the door first at a financial services firm or a commodity based firm (oil analyst for a gasoline firm), and need to explain to a business person why you couldn't make it into front office to begin with.

On the other hand, two of my colleagues were CFA's in their 30's and were only making about 30k more than me. Many CFA's I have met don't seem street smart and mostly work at a big company and get stuck as a VP (Not a bad lifestyle). I do wish I had time to take the CFA and I do still think it's a good curriculum. However, if you already have a M.S. in finance, it's kind of an overkill. Lastly, I found CFA holders (the ones I personally met) to be risk adverse and not think outside the box.

Where is the economy moving (take this with a grain of salt, as I am likely being biased):

1) Technology jobs
2) Oil & Gas
3) Healthcare/Biotech
4) Finance jobs are really on the decline and the number of applicants are increasing - you can still make it but you have to have a story, and be in
5) Government/Military Contracting - If I could do this all over I would likely go become a merchant marine and study at a maritime college, and potentially become a Naval Officer/Air Force/Coast Guard Officer/merchant Marine. Your exit ops are government contracting with secret service clearance (Serious pay). Some of you that are juniors should also look into NROTC/ROTC(Army/National Guard), as many students graduate with debt and the military will give you good pay as an officer, and you could get an MBA after and do IB or Consulting (which would be fully paid for). If you saved your money well, you could have over 200k after about 4 years (My friend did that and is day trading off his 200K).

Top Finance Hubs:
SF/Chicago/London/Singapore/Tokoyo/Hong Kong/Frankfurt/NYC/NJ - Jersey City/Connecticut

Location:

I didn't realize this until my junior year of college, but either move to the economy of a state that has your job you want to do (I.E. Oil/Gas - Texas/Alaska) or change your major in your state if you want to stay there.

General Notes (for people wanting to do finance):

-Try to do 2 years at a BB bank, and then work at small firms.

-After your 2 years experience you need to negotiate your salary. Tell employers when you are interviewing that you signed a non-disclosure agreement and cannot disclose your current salary. The employer will typically force you to give them a range, and just give a range after doing your research.

Example: I was offered about 75k moving to my new job. I got it bumped up to 88k (Not counting Bonus). This means if I stayed in the corporate would, my next move would be at least 96-100k (However it does get tougher to find work as you move up on the salary chain).

Good Degrees for Buy-Side/Prop Trading/IB (From what my friends told me that do IB):

Engineering
Financial Engineering
Physics
Mathematics
Computer Science
Information Systems
Machine Learning
Statistics

Things you must do as a student:

Get as many internships as possible and spin it - I.E. I worked at a hotel, and transformed my internship into a technology role. I specified financial figures I saved.

What is your value proposition - Mine was I know the business just as well as a business person, and can build computer systems to automate my job or automate trading. Likewise, I barely talked about my grades and focused on completing 4 internships while obtaining a dual degree.

Where do you want to be? I wanted to move to Hedge Funds, and luckily received an unpaid hedge fund internship. That internship was paramount into my move for the BB Hedge Fund Unit.
I now hope to start my own fund after a few years of successful prop trading, and will implement my system.

Lastly - Please let me know what people think of what I wrote, and also ask me anything related to landing finance jobs! Best of luck!

 

The issue is I only start out with 25K to trade with (I am starting out as a junior trader, as my background was previously IT), which caps out at 8 Million (for each product, which will total to 16 million). I am trading options and FX. Every two months if you have a risk adjusted return of 4% (8% between 2 months), the capital doubles. Meaning in 2 months, I could potentially have 50k to trade with (maxes out at 8 Million). I keep 80% of profits, and the firm takes 20% of profits. There is no salary. I would need a minimum of 200k to trade full-time to live comfortably. I am planning if I take more time to have a high return or even if I lose money! I have monthly expenses on my mortgage that around about 2k. I need to unfortunately have a night job (wait tables, but during the day trade 9 - 4. Then Trade currencies at night, since London has most of the volume after NY) as the trading business grows. Not everything comes easy!

 
Best Response
Ponzi_Scheme:

So I wanted to give some people hope. I will keep my firm names anonymous, but I want to give people help. I am just going to have some random points, and want people to ask anything or even state if you disagree so we can get a nice discussion going.

My Profile: I graduated in 2011 with a technology degree and economics degree from a non-target school (NYC area). I graduated with less than a 3.0.

My Career Progression:

1st Year Operations BB Bank - Automated my job -> Promoted to group of my choice (Couldn't land IB, and glad I never did it (hours insane and pay is better on buy-side - if your good) - but IB is still a good place to start though if you can break in. I chose the internal hedge fund - which was disbanded in 2013 from Dodd-Frank)
2nd Year - Hedge Fund Technology - Hybrid role doing algorithms and some software development. I also failed CFA Level 1. Never studied for it again, due to time.
3rd Year - Consulting for Private Equity Software (Client facing sales/software financial modeling development). Quit due to hours,politics, and outdated technology.
Current- Landed a job at a prop shop (Options/FX swing trading), and will be waiting tables at night (steady income as I build my trading business and transition to a hedge fund portfolio manager)
Long term plan - start my own hedge fund. Been building a custom machine learning system with 2 developers for 3 years. I have people that will invest - but I want to gain experience at the prop firm, and obtain my Series 65.

Is the CFA Worth It?

CFA level 3 passing will potentially help you move from operations to a client facing role within prime brokerage (assuming you are not in operations >2 years). A fellow co-worker did just that, but you really need to have your foot in the door first at a financial services firm or a commodity based firm (oil analyst for a gasoline firm), and need to explain to a business person why you couldn't make it into front office to begin with.

On the other hand, two of my colleagues were CFA's in their 30's and were only making about 30k more than me. Many CFA's I have met don't seem street smart and mostly work at a big company and get stuck as a VP (Not a bad lifestyle). I do wish I had time to take the CFA and I do still think it's a good curriculum. However, if you already have a M.S. in finance, it's kind of an overkill. Lastly, I found CFA holders (the ones I personally met) to be risk adverse and not think outside the box.

Where is the economy moving (take this with a grain of salt, as I am likely being biased):

1) Technology jobs
2) Oil & Gas
3) Healthcare/Biotech
4) Finance jobs are really on the decline and the number of applicants are increasing - you can still make it but you have to have a story, and be in
5) Government/Military Contracting - If I could do this all over I would likely go become a merchant marine and study at a maritime college, and potentially become a Naval Officer/Air Force/Coast Guard Officer/merchant Marine. Your exit ops are government contracting with secret service clearance (Serious pay). Some of you that are juniors should also look into NROTC/ROTC(Army/National Guard), as many students graduate with debt and the military will give you good pay as an officer, and you could get an MBA after and do IB or Consulting (which would be fully paid for). If you saved your money well, you could have over 200k after about 4 years (My friend did that and is day trading off his 200K).

Top Finance Hubs:
SF/Chicago/London/Singapore/Tokoyo/Hong Kong/Frankfurt/NYC/NJ - Jersey City/Connecticut

Location:

I didn't realize this until my junior year of college, but either move to the economy of a state that has your job you want to do (I.E. Oil/Gas - Texas/Alaska) or change your major in your state if you want to stay there.

General Notes (for people wanting to do finance):

-Try to do 2 years at a BB bank, and then work at small firms.

-After your 2 years experience you need to negotiate your salary. Tell employers when you are interviewing that you signed a non-disclosure agreement and cannot disclose your current salary. The employer will typically force you to give them a range, and just give a range after doing your research.

Example: I was offered about 75k moving to my new job. I got it bumped up to 88k (Not counting Bonus). This means if I stayed in the corporate would, my next move would be at least 96-100k (However it does get tougher to find work as you move up on the salary chain).

Good Degrees for Buy-Side/Prop Trading/IB (From what my friends told me that do IB):

Engineering
Financial Engineering
Physics
Mathematics
Computer Science
Information Systems
Machine Learning
Statistics

Things you must do as a student:

Get as many internships as possible and spin it - I.E. I worked at a hotel, and transformed my internship into a technology role. I specified financial figures I saved.

What is your value proposition - Mine was I know the business just as well as a business person, and can build computer systems to automate my job or automate trading. Likewise, I barely talked about my grades and focused on completing 4 internships while obtaining a dual degree.

Where do you want to be? I wanted to move to Hedge Funds, and luckily received an unpaid hedge fund internship. That internship was paramount into my move for the BB Hedge Fund Unit.
I now hope to start my own fund after a few years of successful prop trading, and will implement my system.

Lastly - Please let me know what people think of what I wrote, and also ask me anything related to landing finance jobs! Best of luck!

My question is: are you dumb? You have numerous grammatical errors in this post, could not convert your ops job to something better at your current firm, failed CFA level 1, and got shitty grades at (what apparently is) a shitty school. Which leads me to believe that waiting tables is not an unreasonable outcome for you. No offense, someone needs to wait tables. The trading 'job' you have, is not a real job and you will likely lose everything. Do yourself a favor and go back to ops, as a steady paycheck will be a good thing for you.

Good luck.

 

What do you mean I couldn't convert it to something better? I moved from ops into a bulge bracket hedge fund doing trading algorithms. The unit was sold off because of Dodd-Frank. I left to then do private equity technology consulting. You obviously didn't read the post. Your right there are spelling errors. It was a long post, and probably should have read it over. How is my prop trading not a real job? What's with the negative attitude? Have you taken the CFA? No need for name calling. My failure of the CFA was due to long hours (7 day work weeks, and I didn't put enough time into it). What is your trading return? So far, I am averaging 5% per week in FX. Options I am still training on.

 
Ponzi_Scheme:
Your right there are spelling errors.
Case in point. It's not your spelling that's the problem, but basic grammar. (*"You're" means 'you are', while "your" references something that belongs to the person to which you are addressing, for future reference)
Ponzi_Scheme:
So far, I am averaging 5% per week in FX.
The fact that you think this is reasonable or that you're actually doing this and it's sustainable is laughable. You wouldn't be waiting tables if you made 5% per week consistently. You probably don't know this, but a 5% return per week would mean more than 1,000% return per year. Since you supposedly worked at a hedge fund, you would presumably know that 1,000%+ per year is a touch above the average hedge fund return. Claiming that you are getting a 1,000%+ return per year just makes you look foolish/naive.

So, once again: are you dumb?

 

Ponzi,

are you writhing code to trade for you? ( Im assuming you are) or are you trading yourself? Id love to learn more about the Tech side of trading, dont let Dick get you down!

Cheers

Working @ a retail brokerage firm... Interested in what other jobs are out there in the World of Finance, if you have any advice feel free to PM me!
 

Dick,

Past returns do not indicate future performance, and it's actually illegal to market that to clients. I never even almost indicated that I expected to earn 5% per week every week. I simply stated how I was doing so far because you said my returns will likely go to 0. Likewise, I don't manually input trades - I have a machine learning algorithm I built - but it hasn't been tested long enough to know if it's data mining biased or just luck.

 

Noxid,

All my trades are algorithms that use real-time machine learning.

The stack is Java, Python, Hadoop, mahout, MySQL (For the security master/FX master), Apache Storm, Esper (In memory Java DB engine). I have been working on it for 4 years, and am currently testing it live.

 

For starters, anything below a 3.5 GPA means you weren't trying, or greatly overestimated your abilities and overloaded yourself. Failed the CFA. Quit a consulting tech job because you didn't like having to go into work? You should have finished out the year (if not 2) and looked to land a better gig.

Coincidentally, is waiting tables at night, dealing with shitty hours, pay, tips and customers; really a better gig than a consulting tech job?

You didn't land a job at a prop shop, more than likely you are being churned for commissions and to pay for your own 'training'. Based on your current financial situation, you shouldn't be trading -- at all. Hate to burst your bubble, but I don't think running your own HF is even remotely in the cards. Commodity Pool Operator is the term you are looking for.

I've never heard of anyone getting an active duty commission, secret service, FBI or any other good government appointment with a sub 3.0 GPA.

I think you received good advice above, get an actual job with good career prospects.

 

Hello, new monkey here.

I'm finishing up my finance MBA and want to stay in cincy or move sf. I'm going to a 'feeder' school for accounting - Miami Oxford - not really a huge finance school, but, from my understanding, it does well in cincy/okay in Chicago. Tried getting in the IB and Asset Management clubs and doing some of the finance case competitions, and have been networking my ass off (mostly in cincy/sf).

Interviewing: My background is in systems engineering, mostly coding logic and mathematical/stat modeling, and I've been actively trading my own portfolios for 4 years now. Do banks care about this? If I go to a whiteboard and trade any equity they ask me to, would this look good or would I look like a showoff? I have pretty good returns (but who doesn't in a bull market, I suppose).

Chances: is there a chance to break into the industry? I'm looking more into M/A.

Thanks

 
I am a former <span class='keyword_link'><a href="/resources/skills/trading-investing/stockbroker" target="_blank">stockbroker having</a></span> had many other jobs and have some independent courses that I am using to learn trading besides pursuing my undergrad in mathematics.
I like you story! You seem committed and dedicated into turn you prop experience into a business. I am looking to manange the money that I save from other jobs as I don't have a strong networj base. Besides commisions amd fees I think I can make more money making trading decisions.
Let's connect on Linkden as a rebuild my profile!
 

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