Sucking as a junior trader

Analyst 1 in PropTrad

hi all. I've been working as a junior trader at one of the bigger prop shops (Akuna/Optiver/IMC/DRW/Belvedere/SIG) for 6 months now and have been screen trading (options MM) for the past 3 months or so. I have been struggling a lot and my constant fuckups (ex. hedging the wrong way, making shitty markets to brokers, making bad trades in general because I am not processing what's going on in the market, etc) are really taking a toll on my self-confidence and stressing me the fuck out. I understand (nominally) that I am relatively new and shit happens, but in the moment when I mess up and the senior traders are yelling at me, it just feels like I am a gigantic fuckup and just costing the firm money. Also because I'm the only junior trader in my group, it's hard to get a sense of what a normal/expected progression as a trader is supposed to look like and how good I should be at this point.

So given all this, I was wondering if anyone could shed some light on the following:
- how long does it take to become a good/confident trader
- dealing with fuckups when trading (moreso mentally, I feel like I get pretty tilted when I make mistakes, and that just leads itself to more mistakes)
- any general advice that might be helpful to a junior trader

Appreciate the help!

Comments (26)

Most Helpful
Jun 28, 2020

Sit down and write a list (pen and paper):

  • Write a list down encompassing every single time you messed up (situation, how long it took to play out, and what the end result was)
  • Introspect: why did you fuck up? Are you being careless?
  • What were the variables that contributed to you dropping the ball (variables you can control and variables that you can't control)?
  • What would you have done differently? Are there any processes in place that you can implement on a go-forward basis to manage risk? If so, what do these processes look like?
  • Set up a time to chat with senior traders / your direct manager and show them the list; explain that you're disheartened with your performance, but you love your job, you care about your performance, and you tried to come up with a list on how you can potentially improve
  • Listen to them very closely; take notes, and modify the list with feedback that they have
  • Implement your/their combined thoughts into your day to day

It's tough when you're just starting out, but as you indicated, you're new and there's a learning curve. With that said, it's your responsibility to maximize your efficiency and optimize your performance.

You're never going to stop fucking up in your life, ever, regardless of how senior you get. Everyone makes mistakes, and everyone will continue to make mistakes - it's human to err. Just accept that it happens, learn from it (this is the most important part), let it go, and improve.

    • 44
Jun 28, 2020

this was a great response

    • 1
Jun 29, 2020

This is spot on.

    • 1
Jul 7, 2020

Not so easy. I mentored junior traders too. Some of them just don't have what it takes. Everyone can be a trader but not everyone is good at it.
Lot of junior traders are not taking risk when it should be and taking excessive risk when it doesn't. It is more about personality, everyone's character is different
Quaint trading may work in high freq spaces but for swing trading, human intuition is still important. OPs are better off woke in tech, looks he will be better off work in Silicon Valley instead of Chicago.

    • 1
Jul 10, 2020

Great response, hit on a lot of important points, one aspect that is worth thinking about however is the stress factor.

People often talk about how the stress starting out is a normal part of the job, but in reality, the better you do, the more stress you have. If you are simply being very hard on yourself, that's not necessarily a bad thing, as long as you can channel it well. I fall into the self induced stress camp, was concerned about getting cut at my 6m performance review, when in reality I got put on the fast track to running a group. This is where Anons point on having some candid chats with your team is pretty helpful.

If the feedback from your team is that you are doing well, then you have nothing to worry about, but if your performance really is that poor, then that may be a sign that the trader route might not be for you. That being said, it's really hard to get hired, so clearly you're smart and have some drive, if things aren't working out as being a junior trader, I'd highly suggest focusing the skillset on research and strategy development. That's where the real money and career upside is anyway..

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Jun 28, 2020

I've actually been through this, getting yelled at for doing and saying the wrong thing as a junior trader. For example, I was losing money when I making market on the screen and I can prop trade on the side but I wasn't communicating with my senior trader on when risk I was putting on and the main boss was going around people's screen to see their fills and he saw me putting up 10 clips and PV01 for that size is a hundred bucks and me being a junior trader, he didn't want me to put that kind of size on because I was also trading a super volatile product. Even worse, I was losing money on it. Another trader took over my seat and he told me to come into his office, I thought he was going to fire me. As I sat there and he asked me who the fuck gave me the permission to put that kind of size on? I told him, I was losing money making market from getting run over and I thought I had conviction on the prop trade but at the EOD, I had no edge. He told me he doesn't care if I made money on it, this business is about trust and when it comes to trading, trust is the most important. I felt like a piece of shit and I told him I'll never do it again. He said if I did, he will take it out of my pay check. Another example, natural gas was trading during settlements and it was my job to look at the outright and report where the prices were heading and my senior trader was looking at our positions across the curve... I said "fifty five and five"... He yelled at me and said "DUDE IT'S FUCKING FIFTY FIVE AND A HALF... JUST SHUT UP!".

if you want to succeed in this business, first own up to what you fucked up on. Did you lose their trust and why? Also when you're outside of work, sit down and read a sit ton of trading books and try to find edge and the way you find edge is by reading something and asking yourself why does it work and what is the rationale for doing this and actually, literally trying it on the screen and improving it with your own touch. The way I gained my edge was looking at the market differently as opposed to just candlestick charts and trying to predict directionally.. No one book will give you an edge because screen time and trying to create various technical strategies plays a huge part. The trading platform that we were using had over hundreds of various indicators and I could create my own, as well, from scratch. When I see these wanna be traders explaining what a stochastic indicator is and the first thing they say is "overbought/oversold". This is what I said initially too... He screamed, "NO THE FUCK ITS NOT!!! IF SO, WHY?! EXPLAIN IT. GIVE ME THE FUCKING MATH BEHIND IT" and he literally yelled and told me to "fucking look deeper" so I can explain it better. I remember my job was to look for various strategies and he told me write a list of shit that works and what doesn't work and why. I think having a boss like him made me realize trading isn't simplistic and just giving binary answer. You always need to back it up with the rationale for doing it and explaining the outcome thoroughly, you need to have a level of curiosity, experimenting, why it works and doesn't work and talking like a trader and thinking like one is what elevates a junior trader into a senior trader.

    • 12
Jun 28, 2020

Any reading list that you would recommend?

Was there any book that really helped give you a good grasp on how to find and define your edge? I get that it takes a lot of screen time regardless but can you point to any resource that gave you a good framework on how to do it? What are good books for beginners?

Jul 10, 2020

The best resources you can get, generally require you to be in the game already. If you are, getting plugged into as much bank research as you can get your hands on, especially trade pitches and strategy pieces. Don't focus so much on the trades being good recs or bad ones, focus more on understanding the process different people use, then develop your own style.

  • Prospect in IB - Ind
Jul 2, 2020

Rookie here- what does "putting up 10 clips" mean? Ty

  • Analyst 1 in HF - EquityHedge
Jun 29, 2020

You got the job, so you definitely have the mental horsepower. Avoid thoughts of imposter syndrome (it won't help you right now). Did you get close with any trader with a bit more experience than you? Try finding an ally/mentor you can learn from. Also just take an hour or two after work to just recap everything you did/ catch up on news or whatever. Just try to avoid the same mistakes, and you will inevitably improve.

Jun 29, 2020

it took me about 5 years....good luck

    • 1
Jun 29, 2020

Lol I get bunch of DMs from these wanna be traders on IG calling themshelves traders with a photo of them on a laptop with a stack of fake cash on the side with their fake tacky gold watch while using tradingview as their platform and I ask them, how long have you been a trader and they say, "oh, five years!".... and I think to myself, "what a fucking moron".... doing your crap triangle bullshit charting for five years on your laptop on the EUR/USD pair and paper trading doesn't make you five year experienced trader. it's no different than watching paint dry.

    • 1
Jun 29, 2020

hey is the reason you prefer to trade long end is because it's less choppy relative to short end? you know you can neutralize the noise by removing the time component and just applying tick move. that's what I do even for commodities and it's so much better for me. I'm sure you already know this but... hey! what do I know.

Jun 29, 2020

the 10yr-30yr tends to have more tradable volatility.
i can trade 30yr bonds back and forth 4 times 5 ticks each while the 2yr note might not move at all

Jun 29, 2020

On the hedging I'd suggest writing out on your notes or in excel the physical and the derivative portion of what you are trying to accomplish this will ensure that you do not "go the wrong way" and if you are taking orders from others on the hedges just reconfirm the order with them before enacting (completely spell it out). "Buying/selling X contracts of Y; Confirmed?". It might sound overkill but thats the point. Keep your head up everyone makes mistakes but there are no excuses for not learning from them and being careless.

    • 3
Jun 29, 2020

Were you a trading intern? I think the expectations may differ if you already had experience coming into this role.

Jun 30, 2020

Guys, this thread has made me wonder. I have a potential job offer to move roles internally to become a trader within the WM division of the bank I work for.

I've no experience in trading, I'm not a maths wizz (did economics degree so my maths is okay) ... could I get by in this role with being SUPER smart / technical / mathsy?

Jun 30, 2020

"trader within WM" is generally just an execution role....not the same thing as being a "risk taking trader" with full autonomy and control of taking risk...so go for it.

being a "trader" on a risk taking desk (for example, the MBS desk, or the swaps desk, or the govie desk inside the investment bank) is like being a mini hedge fund manager that also makes markets to the investment banks customers...but within WM its a completely different thing.

however, trader within WM is a good place to start

Jul 2, 2020
ironnchef:

"trader within WM" is generally just an execution role....not the same thing as being a "risk taking trader" with full autonomy and control of taking risk...so go for it.

Agreed on WM is mainly execution, very different and you don't have the 'hedging' burden

  • Analyst 1 in S&T - Other
Jun 30, 2020

Best advice i can give is to make sure you get a full nights sleep, i have to be extra Extra careful if i only slept 4-5 hours the night before. You think you can still do the job, but when you need to multi task and make quick decisions the cognitive ability jsut isn't there

    • 1
Jul 4, 2020

Short on sleep days in trading are just brutal. Murphy's law, there will always be something tough that comes up.

Jul 6, 2020

It sucks to be a senior trader too, at least in big bulge bracket.
Harder to become MD for trader now, banks try to automate or replace ur job with junior. Industry is getting more commoditized. Your P&L is good but bank doesn't feel the need to pay you because they argue your LOB revenue either not growing or growth is not sustainable,
Wtf. This industry is nothing like 10 years ago.
Fk Dodd frank, fk all regulators that make market more effiencent and transparent. We could make money using client order flow 7 years ago but now we can't.

Jul 7, 2020

what product do you trade?

Jul 25, 2020

Sorry your rent seeking is being removed

Jul 19, 2020
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Jul 25, 2020