Q&A: Macro Hedge Fund Trader/PM
Hi all - long time reader, first time poster. This website was helpful to me when I first started my career so I thought I would give back while I am in between gigs. Brief background - 10 years of experience in the industry - started my career as a trader at a bank before moving to a hedge fund after a few years. Fire away!
how can guys who traded vanilla rates at a bank for a couple years but never made large P&L...then got laid off and have been out of the markets for 5+ years get back in to markets (even if in a different product)? Without having someone to go to bat for you, it seems that even junior trading positions are out of reach, even tho i would imagine that a mid-level amount of experience would make for a better "junior" hire.
Tough situation - I would suggest learning to code if you haven't already. Most of the junior roles in macro require coding experience (typically Python/R). Many HF PMs who take on an analyst are looking for 'edge' in alternative data sets while banks are looking to replace most of their traders with machines. After that - best suggestion is to network as much as you can - even reaching out on LinkedIn to strangers if you do not have many people in your network already. You might get 100+ rejections for every 1 response but all it takes is 1...
Thanks for this. Do you think coming from commodities (at an ABCD) is a disadvantage when trying to break into HF?
I actually think it may be an advantage. Many of the multi-managers silo their commodity PMs so someone with experience in the physical trading of a specific commodity can add a differentiated view.
on a different note...what kind of macro trader/PM are you? What are some example trades that you might have had on in your past experience? How do you think about market opportunities, and what do you consider micro vs macro from your perspective?
Do you mostly trade the yield curve...FX...futures (i'm assuming all of them), where do you tend to focus? What kind of time horizon did you typically play on? intraday swings, days, weeks, longer?
Can't comment too specifically on my approach as it might give me away. I tend to hold trades for a few weeks to a few months and look for dislocations across and within asset classes.
How did 2018 treat you? Especially the second half...
Best year of my career :)
Thanks for doing this. How many hours do you typically work most weeks?
Typically 50-55 hours in the office. Macro markets are 24 hours a day though so you are always on the clock (and even for positions that are closed overnight you are still thinking about the risks). I also spend a good portion of my weekends reading but I would do that even if it wasn't helpful for work.
What would you do if you lost everything tomorrow (blew up your trading account to zero...all savings gone...unhirable as a trader / PM)?
also, if you were advising a recent college grad who wants to start trading....what product / strategy would you recommend they look into learning?
What are your favorite books on macro/risk management/trading?
What news sources, research notes or blogs do you follow?
What are the main challenges if you try to replicate your strategy in a retail setup?
How are you managing your personal wealth?
What qualities make a great macro trader in your view?
Who is your favorite macro trader/PM and why?
Do you mind elaborating on the use of alternative data sets in macro trading? Simple example would help.
What is the best way to get started in macro trading? I did come across the thread by bondarb.
Many thanks for sharing your knowledge and experience.
Can you walk through a trade you did?
How has your all-in compensation evolved over the past 10 years?
If you could do your career over, would you take an alternative path?
Which BBIB's have the most reputable macro departments (i.e. FICC trading/macro strategy)?
Do you see many PhD's/CFA's in the macro space?
Thanks for doing this!
Best advice you received/wish you received before you started your career at the HF?
How difficult is it to move from prop trading at a market maker to HF? How much do advanced degrees (Data Science, Artificial Intelligence, etc.) help differentiate from the traditional IB/PE background? What percent of your firm has the more traditional background?
Tough. But if he’s at a macro fund they aren’t touching what these boards call “traditional”.
IB+pe+Mba.
Now from what I can tell it varies. Some place more macro bets. Some do a ton of algos. Some do a bit of both. But if you go on LinkedIn and from experience a place like Tudor has a mix of algo types and macro research types. They do a bit different than say a drw but it’s similar.
this dude just dropped off the map..tf
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