I currently work as a physical commodity trader at a large, international, trading house. Trading is dead. Most desks are printing massive loses. There is no volatility in the market and most commodities we trade suffer from massive oversupply. Baring a massive exogenous shock, I don't see it changing in the next 5+ years. Unfortunately the skills learned in trading physical commodities are pretty specialized. My question is, have other commodity traders switched career paths? What have you switched to? What skills transfer and which should I emphasize on my resume?
Is commodity trading dead?
Certified user @marcellus_wallace on liquid natural gas and energy markets.
Expect massive changes in 2019 forward once LNG becomes a main focal point. I disagree that trading is dying, is it harder? Yes, its super hard these days and consolidation has finally started most places. But on another hand, we are seeing assets finally get locked up for 20 plus years in lots of markets which means vol will be coming back. Lots of people are running models from 2008 or even 2014 still and need to move on already. There have been probably 4 major trades this year that killed or some did well on for natty/power vs in 2012 when literally there was zero vol.
Certified user @nofundforoldtraders on market volume, the death of trading and remaining stoic during tough market conditions.
I'm a prop trader at a firm that I see people mention on this board from time to time. Plenty of volume and vol in crude oil futures, as well as TBond futures.
Often, when a trader can't figure out how to make money in the market, they will say "trading is dead" or "humans can't compete with the algorithms" but this is bullshit...It's really just a failed trader saying "I don't know how to adapt to this market environment"
It is very common for a young trader to learn one technique to make money trading, and then exploit that technique for as long as they can...but when that technique stops working...you either adapt...or die (well, in this business, retiring feels like a death). I have seen this many times, and I'm sure I will see it again. Traders who have "failed" and conclude that nobody can make money in this environment. What they really mean to say is "I do not know how to make money in this environment" but that is a very emotional and difficult thing for a trader to say.
As a trader, you must be confident that you will be right...that you know better than the rest of the market (else, you would never put on a single trade)....and when that confidence turns on you, it really does feel like a death. So, either you learn how to adapt (or your trading model does the adaptation for you) or you lose money until you quit. I've seen this happen to friends and colleagues of mine....some were able to adapt...others were not. Those who failed never were able to say "I don't know how to adapt" ...they would always say "these markets are untradeable" but that is their ego talking. This is a very emotional business. You must understand and conquer your own emotions if you are going to survive.