How can I with no experience become a proprietary trader???
I'm a freshman at a non-target. I have no work experience or special skills to put on a resume. The only thing good, thus far, is I have a 4.0, honors society, Phi Betta Lambda member. I have NO money, so I can't trade, instead i just spend a lot of time virtually trading and reading books... probably the same amount of time a prop trader does. I'm literally obsessed and deeply passionate about trading, not investing. So how would I break into trading? With no experience? I've been learning about the markets for six years, and blew up a couple mini forex accounts because i was greedy and of course had no real money at stack, kinnda like poker.... only in poker i've had better results... However, in my virtual account trading stocks i'm always doing pretty well.. yes i lose often but i cut my losses and let my profits run..
if you're trying to prop trade, experience will be the most important thing you need to gain. Unfortunately, academics really don't help you much in prop trading(although it is necessary to have a good gpa to get into a good shop.)
Ok, so you have been learning and trading for six years and still haven't had any success on the mini-account? There is obviously some factor in your learning equation that needs to be changed. From my perspective, it sounds like you have no risk controls that should be implemented. Trading live capital is a 180 degree turn from trading demo capital. Sit down, identify your weaknesses and strengths, evaluate your decision making processes, draw up a trading plan that will remedy your weaknesses with some sort of risk control.
Stay on the demo until you can be profitable for 6 consecutive mos. When you have a solid track record on the demo, put funds into a mini account. Trade that and try to build a live track record for one year. If you are successful, with your good grades, you should be able to get into a decent prop firm.
yeah in forex i was trading 50:1 leverage and usually leveraging everything.. i got levereged out most of the time... i took too much risk exposure.. because i only had about 500 dollars in my account at any given time, paycheck to paycheck... but now i have no job and can't find one.
thats all though a good 1 year track record? I mean from what i know in one years time it isnt really a good indication of future success... Thats basically what i'm doing right now, as far as, the demo is concerned... I already know what im doing wrong.. and when i fix my mistakes, im profitable... but then my greed and emotions get in the way and i take bigger risks.. since i have very little money..
Also, concerning prop shops what would be a better trading vehicle, forex, stocks, or futures??? I do best with stocks by far I think its because they are less volatile and more trend oriented, as opposed to forex, which is all over the place in the short term.
WHOA! 50:1 and getting margin called?! my assumption was right, you have no concept of risk control whatsoever.
You need to develop a plan to manage your risk. Try taking trades with 1:3 risk/reward ratio, with a stop no greater than 30 pips, and not risking more than 3% of your account balance on any one trade. Once you get up 30 pips, move your stop to entry to eliminate risk. Stage trail your stop.
Follow these three sentences to a T, and your trading will drastically improve.
One year is a good indicator of future success, because most people don't even last one year. Either because a) they have no risk control b) they don't know what they're doing c) don't have determination and resilience. Greed will kill your trading.
There are all sorts of prop shops, you should do what you know and perform best in. Stock are not more trend oriented. Forex is the most trending market.
^^Awesome post. Mix of gartman/market wizards/etc right in thurrr
okay so i just got a job at subway EAT FRESH lol. After reading this post,
//www.wallstreetoasis.com/forums/travel-on-resume-0
im seriously considering following my dreams and thru hiking the Appalachian Trail. For prop trading do you think it will look good on a resume? I mean i have 4 years to save up during school and trade, but if i save up this year and a little bit on next year, take off 6 months from everything in March and hire from Georgia to Maine. Do you think it would look good for proprietary trading?
How to become a good prop trader (Originally Posted: 08/07/2007)
Comments/Suggestions? i know this is a generic title but it's a forum anyway, what do you guys think?
watch jim cramer and try to mimic him
1) Find a market inefficiency 2) Hope its scalable 3) Trade with it
3 easy steps to becoming a master prop trader.
jim cramer is actually not doing too well this year if you follow his recommedations on mad money.
hehehehe...i was kidding...i am an FI guy and actually believe cramer is a stupid idiot...if only you could see him yelling at bernanke and bill poole last friday @stop trading... but seriously, this is not a serious post...can I ask "how do I become an astronaut?"
dude for anyone who hasnt seen the Cramer clip that you are referring to, go watch it immediately on youtube "cramer blows a gasket" he is hilarious
it really is as bad as he says...but if the Fed did lower rates today and open the discount window the dollar would continue to weaken and inflation would likely become rampant
i wanna be a mother fckin hustler when i grow up...better ax somebody
Cramer is a fuckin' nut. If the fed lowers rates inflation is going to go out of control. History has shown that keeping prices under control is the best way to maintain a stable economy, and so the fed is right to be hawkish. Whats more, the feds job is not bailing out investors who take overly large risks.
If hedge funds were buying those ridiculously priced CDO tranches we wouldn't see so many subprime loans issued, because banks would be stuck with the stuff that can't be securitized and sold. This is the dog's whack on the nose for doing something stupid.
Junkbondswap - love the Snoop quote
VERY SIMPLE:
Make a lot of money!!!
...see my post above about breaking into trading. To get good at trading 1)Fund an account and start Trading 1 futures product. 2) Read extensively about risk management, trade sizing, and discpline. Managing risk and sizing trades properly (probably 1 contract to start) is much more important then good ideas. Trade with tight stops and first and foremost preserve capital. 3) Learn everything fundamental about that one product whether it be Oil, Hang Seng Index Futures, S&P 500 futes, or whatever.
College senior considering proprietary trading (Originally Posted: 10/31/2011)
Hello,
I'm an active reader of this forum but have never actually posted until now. I am a college senior with a background in Industrial and Systems Engineering from a non-target school. I am a fairly active equity and options trader who has a deep interest in the markets. I have a corporate job lined up doing industrial engineering but a piece of me is really considering the proprietary route. One thing that makes me hesitant is the chance of being let go from a proprietary firm is significantly higher than the stable corporate job. I consider myself quite entrepreneurial and have some programming experience. What are your thoughts on going into proprietary trading directly out of college? I enjoy trading options and as a result I have eyed peak6. Does anyone have any experience with them? I am looking for a company that provides a strong training program.
I look forward to hearing from everyone!
Sure. There's a lot of Chicago prop shops and Peak6 is one of the good ones. But they layoff a lot of unsuccessful traders too. Peak6 recruits heavily from UIUC's Engineering Career Fair.
Thanks for your input! What is considered a high turnover rate? Does anyone else have any insight on this?
From what I've gathered, most prop firms let go of 25-50% over the course of two years. It truly is a meritocracy.
best path to prop trading for my situation? (Originally Posted: 09/29/2011)
Hello all!
I've been reading WSO for over a year now and I thought it was time to ask for your insight regarding my specific situation.
Background: I graduated from UF a year ago with 3.0 and a liberal arts degree (I know... not ideal). I am not foreign to finance however, I've been studying it on my own since 9th grade, reading books, articles, news, following the market etc. Also, I started trading in 2006, mostly buying options (again, I know, not the path to prosperity but I had very little money and wanted whatever trading experience I could get).
Goal: I want to take my trading to the next level by joining a prop shop. Due to my lackluster academic record and since I lack the quantitative skills required, I know its unrealistic to expect I'll get a job at a JSC, SIG or any of the quanty firms.. I'm interested in more of a pure prop shop, discretionary trading type of place.. basically, somewhere I can succeed without having a exceptional quantitative skills. I'm open to any asset class at this point.
Questions: a) i live in florida, but if I move to nyc/chicago, do you think I can get a job at a solid prop firm with my current credentials? looking for firms that are not necessarily top tier but not trading arcades either... b) i've been considering getting an msf in the next few years... Alot of you say graduate degrees for trading are pointless but I think considering my grades it would be helpful to get me in a better firm.. thoughts? c) are any of you familiar with any mid-tier, non quant firms that might take someone like me?
I'd appreciate any insight whatsoever! Thanks very much everyone
what's your current work experience?
@inthe123: I have one year of experience as a market research analyst and a few months in an underwriting department at an insurance company.... the point is to get enough work experience to apply for an msf and set aside money to start trading again so I can show a good track record. I've also been applying to jobs that are more directly related to finance but its not been easy so far to get interviews.
@1000talents: thank you for your succint advice, you're completely right about the networking, thats probably the best area I can gain an edge in. I have used the search function quite a bit but most people are asking about the top prop firms (many of which are market making firms heavy on quant) whereas I'm looking for a smaller, less prestigious, middle tier firm that's still legit with a good training program.
FNYS and trillium sound great but I'm thinking my academic record might present a bit of a challenge. I just want a good non-scammy firm to start trading at. I'm convinced my trading record will eventually open other options for me but right now I'm thinking my choices for breaking into trading are to suck it up and try to develop a good record at a trading arcade or network and go back to school?
Again, thanks a million for your input, I truly appreciate it
.
I was in a similar situation as you. Liberal arts degree and such. Key is to network and show that passion to trade. And with a little luck you'll land somewhere. Happened to me. True story.
Not sure what the scene is like in FL for prop trading but yea no lie I think NYC/Chicago has more opportunities. First thing I would do is search for those prop firms. This site does list non-top shops and if you use google there is a huge list with addresses and websites compiled by someone on a blog (you'll know what I'm talking about when you find it). I found it by doing a search and I'm sure you will as well.
I know that shops in Chicago have intern programs you could try out. Worst thing you could do is move to NYC/Chicago, get into a shop and actually hate trading. Contact those firms first.
As for the MSF, I wouldn't necessarily say it's useless for trading but it does depend on the program. Princeton's MSF is more quant-y and closer to a MFE than say an MSF at the University of Illinois. Princeton's is more likely to place in trading. Again, depends on the program. There are other's on here who are more qualified to speak about MSF's than me so I may be wrong.
If you're not a star, whether that be as a student or as a proven trader, it's nigh impossible to get your foot in the door at a place that's not just a trading arcade. What's the minimum level of income you could accept? Would you want to be an intern or a clerk? Why would they want you when they can find other people with more experience? Not trying to be a buzzkill but I'm just trying to be honest. It took me a couple years to get to where I want to be but I "made" it eventually.
With that said, it took a lot of networking and bootstrapping. Daytrading your PA is not going to impress anyone unless you produce a lengthly track record. What do you really bring to the table? Can you code? Do you have an edge?
Trust me, there are a lot of prop shops under the radar but you have no idea because they don't advertise. They don't have websites or put up job postings. The ones that do are the big shops and they do formal recruiting. Occasionally you may see some new postings on something like Craigslist but you should be careful about what you're getting into.
As for the best path... You need to show quantifiable reasons that they should take notice. Build a trading application, write a robust trading journal, etc. Going to school will cost you, but it may be a good chance to re-roll the recruiting dice. You'll just need to be a star the second time round.
I definitely took a risk and went back to school (risky cause I had very little money) and someone noticed me. That's good advice and that's how I got in.
thanks inception and metamorphosis for your feedback.
Metamorphosis, dont worry about being a buzzkill, I'm not looking for someone to sugarcoat the truth so I appreciate you giving it to me straight. To answer your questions, I have some other sources of income so I can probably accept a much lower salary or even 100% commission if that makes the prop shop more comfortable in taking a risk in me. I am not against being an intern as long as it is a solid firm where I'll have a chance to prove myself.
In regards to giving myself an edge, I like your idea about writing a trade journal and I think its very doable for me. I want to learn to code, not sure exactly where to start but I honestly I havent researched it much at all. Can you elaborate a bit on what you mean by build a trading application? do u mean create my own trading platform software? or design my own algo trading systems?
Ideally it would be those things (custom made trading execution app, pricing app, grey/black box algos), but if you don't know ANY programming, it's quite a long road. With that said, there are a few places to start.
Excel/VBA-based pricing models: these can be quite good and get the job done if you don't need a lot of speed in your trading. If you don't know VBA, I suggest you start learning. User-defined functions, events, procedures, etc. Here's an example that I found: http://www.optiontradingtips.com/pricing/free-spreadsheet.html
Python is an easy/easier language to learn which means you can produce results a lot more quickly. It has a lot of functionality right out of the box due to its robust libraries. I would recommend to people that are just starting out. Again, if speed is not important in your trading, you'll be able to get by.
I was reading on taking some programming classes myself and the guys on Quantnet have a certificate program on programming. It's worth checking out if you're interested.
QuickFix is what you should look into once your programming is much better. If you can understand it, it will give you the power to build your own custom trading applications that can actually execute orders. This is far beyond what anyone interviewing for an entry level trading assistant job could even begin to claim, so it would set you apart. With that said, you probably won't get to this point until much, much later on so it may not help you right now. If you want to build something actionable in your current state, I would recommend doing a lot of backtesting. There are free trading platforms in the marketplace that will allow you to this and I'm afraid I'm not familiar with all of them, so I'm sure they all have their strengths and weaknesses. These are often made for non-technical users so you do something worthwhile.
Direct move into prop trading (Originally Posted: 10/22/2011)
Hi,
I recently finished my graduation in India and got placed at a BB operations division. However, after i read so many articled about ops being a dead end job, i started looking out for more FO based jobs around.
The Boutiques around here are only looking for engineers/quants fresh out of the IITs. However, a couple of prop shops are providing one month training courses after which i would be hired by them .
Now, my question is whether moving directly into a prop shop with no prior expierience in trading is a bad idea. How good are my options after working for 3 years in a prop shop?
Being in a BB ops based in India , i dont get to talk to the traders (NY , LN based) a lot. So networking to get into FO seems a bit more instant than say a guy based in NY ops.
I was just considering taking a nose dive into one of these prop shops and simultaneously try completing a CFA.
Do you think this is advisable?
Thanks, KJ
I think your options after three years at such a prop shop are great, IF you manage to survive three years. Even established places (like Optiver), tend to pay a decent base and provide you a 2-month training, but quickly get rid of you if you fail to perform. Make sure you understand what kind of shop you are going into and what tenure most junior people can expect to have.
CFA can be good to do on the side if you have the time
Prop desk - Best ways to get into such a position (Originally Posted: 09/10/2006)
I really want to work in a bank and on a prop desk. How can i go about this, what are my best ways to get into such a position. Do prop desks take on Junior/trainee traders
best way is to go through the recruiting process for Equity and Fixed Income Analyst Programs at every IB you can find. Even though you might not be in college anymore you can sometimes apply through this method (if you have no experience in the buiss. and no MBA) Otherwise just apply during the fall and be upfront about what you want to do. You'd probably have to start as a traders assistant and just put in your time and wait patiently to get your shot. As far as getting on to the prop desk, at most firms, it will be a matter that you work out after you have gotten there and have gotten a seat as a trader. Direct hires to prop desks are generally already experienced prop traders or of truly exceptional quantitative ability and training. The only other way it happens is when someone goes through a summer internship working on that desk and establishes himself as worthy of being a traders assistant (aks. trader in training) on that desk. Otherwise, it will likely come down to politics and getting in with the right people once you've gotten into the general equity or FI S&T pool of hires. It is very unlikely you will get a direct hire to so desirable a desk without them first getting some more exposure to you. **ALSO- Some Hedge Funds have started to implement JR trading programs (on a very small scale of course) for those who demonstrate exceptional promise. This would blow any banking option clear out of the water.
Route to Prop Desk? (Originally Posted: 04/13/2007)
I know most banks have traders that make bets with the bank's own capital (aka prop traders). Is this a position similar to an analyst that one can get right out of college? And also, does anyone have any more info on prop desks, for example, I know Goldman Sachs has one but I can't find anything about it on their websites, just articles written about them. Thanks.
there are other threads about this. generally you're not gonna start out on a prop desk. you're also not gonna start out actually making prices on a flow desk either. you will sit on a trading desk and learn. in the meantime you will try to add value as best you can and be grateful.
Would it be sensible to say in an interview that your ambition is to trade prop? Or would they view this as overly presumptuous?
I think that if you said that, then I would ask you what experience have you had that makes you think prop is what you want to do.
Secondly, what makes you qualified to be a prop trader?
I tend to agree with Jimbo. Just get on a trading desk, shut up, learn, do what you are told, and like it. Once you build a realationship and show some sort of aptitude for trading, then sharing your ambition might be okay.
I know a grad working GS's prop desk in TO, did a 3rd year summer there at prop and is going back FT (ranked 7/280 in class). Definitely possible.
I know 2 ppl working @ GS prop desk this summer Don't really know the process specifically I think its a regular interview at first then GS will place you base on how you do
that's one freaky looking picture.
i'm going to be on a prop desk this summer (overseas though) and my attitude about it has basically been "do whatever youre told"
breaking into prop shop/quant HF at junior level (Originally Posted: 05/03/2007)
Hello, I am currently an investment banker, but I am looking to get into a prop shop/quant HF, as a junior trader or assistant trader of some sort. Any advice on how to go about it? Seems like finding the door in is tougher in this field than in banking/pe/long-short hf/etc etc, but that might just be a function of my current career. Any help would be great; I hate banking, I need something engaging/intellectual/semi-cerebral to do, and doing LBO models all day is somehow just not cutting it
Thanks in advance for your help
sales people know a lot of fund managers, maybe talk with some folks on that side.
Trading - Best way to get into a prop trading? (Originally Posted: 12/25/2010)
What is the best way to get into prop trading. I have worked as a stock broker. I have my Series 7 , 63 and BS in Economics. I think a prop trading firm is my best bet. any suggestion ? Does anybody know firm that do not require capital contribution.
first step: networking Once your in the door have a great/ successful track record with documents to back up
I maybe wrong but that's my 2cents
What is the typical path for someone to land a FICC prop desk at BB? (Originally Posted: 08/25/2011)
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the typical path would have to be invent a time machine and go back in time to pre-Volcker Rule when prop trading groups were not outlawed at bank holding companies. So assuming you did that:
is it all about who you know? No. It's all about PnL and whether your strategy fits their portfolio. Networking is important like everywhere else but recruiters should be all over you if you have a verifiable PnL with large enough assets.
it's not years or experience per se. More like "how many years of awesome PnL with large AUM?" More the better obviously.
usually prop desks at BBs only hired experienced traders - whether from HFs, prop trading firms, or flow traders at BBs that start to stand out. Further degrees are not whats important for experienced hires- It's all about #2.
given #2, absolutely.
p.s.- I'm not a prop trader or even work at a BB but my understanding is based on various career bios and a short discussion in 08 with a hedge fund trader that used to work as an MBS porp trader at lehman. I'm 99% sure my view is correct.
Breaking Into Prop Shops: Evaluating My Credentials (Originally Posted: 06/11/2013)
I’m heading into my fifth year at a Midwest state school and I’m hoping you guys can help evaluate my credentials for getting – at the least – an interview at a respected prop shop. Here’s what I’m working with:
Education: School – University of Iowa Majors – BS Economics, BS Mathematics, BBA Finance Minor – Computer Science GPA: 3.2 (finance/econ higher, math lower)
Relevant upper level coursework: Applied equity valuation, fixed income securities, commercial banking, financial accounting, microeconomic theory, mathematical economics, game theory, labor economics, econometrics, mathematical statistics, multivariate calculus, and another full year of math/cs courses.
Work 2006 – 2009: Local Grocery Store 2010 – 2011: Student Clerk for University Hospital 2011 – 2012: Internship with the Dean of our University Hospital 2012 – Present: Web developer for University Hospital
In addition to taking 15-17 credit hours a semester I also worked 15-20 hours a week in non-work/study positions. In the time I've been working at the Hospital I've increased my pay about 75%.
Technical Skills: VBA, Python, and Java
Personal interests: Besides managing my own portfolio I’ve built a trading platform in Python that allows me to test strategies on historical and real time data.
Any help and insight is much appreciated.
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