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GUEST COMMENT: Face it kid, you’re not good enough to get into trading

So kiddo, you fancy your chances as a trader? Maybe you’re a fresh faced grad with an analytical mind, straight out of your PhD in Astrophysics? Perhaps you’re a mathematically inclined accountant who trades CFD’s in her spare time or places the odd spread bet on the FTSE 100?

Almost every week the Evening Standard runs a story about how a group of traders just dropped 50k on bottles of champagne in the latest top Mayfair club, fresh from a bonus bonanza. Perhaps they sorted sub-prime securities at just the right moment, or invented the credit derivative. Or maybe they were just lucky – a rising tide lifts all boats after all. And quantitative easing has given the average trader a lot of cheap liquidity to play with.

After all, it seems so easy. Once you’ve seen one trading floor (capacity anywhere up to 1,000 people) and realised that each of the top 20 banks have at least one (the norm is to have two separate Equities and Fixed Income floors), you’ve done the arithmetic and realised that a lot of people are trading every day in the City and in top hedge funds. The odds at getting a foot in the door can’t be that bad can they?

Well just remember that every trade has two sides. When Nick Leeson blew up Barings, the trader on the other side of the trade, Eric Mindich, was Goldman’s youngest ever partner at the time, and has since set up his own hedge fund, Eton Park. He also pioneered merger arbitrage (if you need to look that one up you’re probably further away from a successful career in trading than most of the others reading this piece, which is already pretty far). Take an honest look in the mirror – which of the two do you imagine yourself closest to?

Here are just of the few skills you’ll need to be an even mediocre trader:

Quick-thinking – you’ll need to be able to make lighting fast decisions, under a lot of pressure, in the middle of a loud, angry trading floor. And if markets are choppy and you just lost half of your year to date P&L in your previous three trades, can you keep a cool head and trade yourself out of that without blowing up?

Managing conflicting (and very sociopathic) personalities; when the head of Pan-European sales calls you into a corner office and balls you out for shorting the stock he’s been pumping to all his clients, what will you do? Add to that the fact that you know he can ruin your career, so influential is he in the bank. And that he’s an ex-triathlete (alpha types tend to do well in banks), two metres tall with halitosis, a mean squint and a bulging vein running down his forehead.

Getting up early. It might sound flippant or easy to do but can you really roll out of bed every day at 5.30AM? if you’ve ever travelled to work on the tube at that time you’ll know how unnatural it feels, surrounded by others who have to get up at the same ungodly hour (McDonalds burger flippers, nurses, TFL employees..). And if it’s Thursday and your brokers have taken you out the night before and you got in at 3.30AM, do you think your boss will care when you can’t see your trading screens during the morning call three hours later? Hell no.

Clearly there’s a lot more to being a successful trader than the above, but you can have those three for starters. Now call me in two years and tell me if you’re back to auditing Plc’s, or you’ve retired to the Hamptons.

The author is a trader who takes exception to the assumption that his life is easy.

Comments (26)

  1. I would say a large trading floor is made up different types of people. Not everyone is a superstar, some traders are decidedly average and do enough to get by, others get in and manage to stay there through who they know.
    Clearly there has to be a certain level of competence and the weak will ultimately be weeded out, but lets not try to build up traders as superhuman, when for the majority that is clearly not the case.

  2. What a waste of time and energy this article is. Utter nonsense. You clearly have deep insecurities such that you have to come onto an internet website and vent your fustrations out on young ambitious kids. Like I said before, banks are full of traders. Only two dozen of them are good. And these ALWAYS leave to better pastures. The rest are chancers, has beens, furniture pieces. Its not difficult. IB’s are all about risk management. And most clients couldnt give a monkeys whether some 25yr old greek bonds trader lost them money. Theyre too busy with their mistresses. Luck and timing play a big part. Being intelligent is not the most important thing. Experience is. Id love to see your PnL. My 4 yr old daughter’s PnL probably looks better than yours!

  3. lol I think this is in direct response to a middle-office kid who “made his mark” with the CEO.

  4. I have never ever met a trader who actually knows what he is doing – they are all a bunch of coked up trend following adrenaline junkies – real quality in this business is very very rare – delusions of grandeur on the other hand are commonplace.

  5. First of all citykid, that move to ask the CEO for a trading job was stupid. Not because it was ballsy, but because the CEO is pretty far removed from the floor. If you really want a position on the floor, start with the traders. Come in early and ask to sit with them in order to learn. You’ll find that the pace of a trading desk makes for a very different experience than the random punt on cable or gold.

    Two facts to remember:

    1. Most traders are average. There are a few Mindiches and a few Leesons but most are in the middle: making enough money to keep them around on pretty decent pay, but not so much that they’re in the big leagues.

    2. The standard of this average is very high. As I found out, this is a game where you have to work very hard just to be middle of the pack.

  6. Well-written, well-said and good fun. The guy writes well, give that to him. Doesn’t say much – other than working in finance involves getting up early, and if you can’t take a dressing down from a superior when you get something wrong, you should probably stick to something simple, like staying in bed. The market is a big expectation machine: it takes and takes and gives nothing back to anyone. Pointless – don’t you sometimes find yourself staring at the Financial Times and an article about coal consumption in Argentina and realising it’s just not going in, and your eyes have stopped working!? But on occasion, when it gets going and you’re on the right side of a trade, the thrill is almost sickening. Well worth an early morning! Animal spirits indeed.

  7. Well done you . Face reality – you have a terrible job. You might make some money, but you still have a terrible, terrible job. And it clearly shows. What a conceited, self important load of tripe. Just because you get up early in the morning people have to respect you? Get back to your screen, you monkey.

  8. This guy describes speculators. i.e. testosterone filled white trash dumbasses without any real clue about what proper investing is about…..go back to bed you amateur or do something useful with your life….

  9. @Guest – if you think Eric Mindich pioneered Merger arb then you are even dimmer than the general gist of your article suggests.

    In the small provinical town where I work there are many people who remember Ivan Boesky fondly….. perhaps you are further away from trading than you think.

  10. Eric Mindich pioneered merger arbitrage?????? Dude, he was snot nosed kid in high school Ivan Boesky, and other less criminally oriented dudes were in the game already…. Pioneered risk arbitrage, Eric Mindich, are you some sort of drone who works for him? Drunk the cool aid?

    NotEasilyFooled Reply
  11. “a mean squint and a bulging vein running down his forehead”
    HAHAHA, Obviously you are given a lot of Hard time at your job. Lets face it, you are not good at it either. you are a pathetic, insecure, clueless, abandoned, loser, lowlife type who has nothing to do better than writing an article like this.
    Now you go think about all this, and call ME in two years you loser.

    graduate_trader_and_succesfull Reply
  12. This is a load of rubbish. If anyone wants to be a trader then they just have to be persistent. Knowing who Eric Mindich is has nothing to do with success in life. Retarded post…but funny at least!

  13. if this guy had the balls, he would have his name up there with the article. Clearly, he is a total loser, or else who would write anonym articles for young graduates on a career website.. Cant believe we are audience to such garbage

  14. I’m a trader at a hedge fund and sometimes dont get in till 8.00 am…. Its not how early you get in (face time doesnt apply in trading), its what you do when you get in. Most equity traders at banks get a tiny book to intraday trade and facilitate clients and think they are George Soros all of a sudden! If they were any good, they’d be on the prop side or in a hedge fund. Chump, stop writing nonsense, get back to working my order 25% of volume and get over yourself

  15. 99% of traders make their money based on carry trades, bid-ask speads, arbitrage, negative basis trades etc. They make profit from smaller players that want to make real investments or hedge themselves and get compensated with a few bps for providing liquidity to the system. You have to be a moron not to make positive P&L. The remaining 1% work in prop trading and hedge funds and use sophisticated models based on fundamentals and trends, mostly computerised. The kind of trader who uses instinct and guts to conquer the markets simply doesn’t exist. It’s a Hollywood myth. I’m not saying it’s an easy job. It’s really stressful and you cannot do it for long. But it’s not exactly rocket sciences.

  16. One of the biggest bonuses of early morning run to is the fact that you can drive your Aston or Ferrari without getting stuck in London traffic. Only losers take the tube at 6AM. I call bluff.

  17. .I think that article was written by a junior. No one with real trading experience would use that kind of language. What a sad little man !

  18. i wish i worked in trading instead of being stuck in operations.

  19. i’m a trader in a hedge fund – probably with net worth that amounts to all of yours out together. I got here because I am smart, quick thinking, good looking, look after myself – unlike you losers. Go back to your sad little settlement jobs and get a life…and before any of you insult me, just realise that some of my hard earned income gores on supporting your kids in some mediocre state school.

  20. Eh sarah, we need more qc on the articles here. Comments here are all true depending on where you sit, speaking from experience.

  21. The language is a bit harsh but credit to the author on highlighting some basic hard requirements – waking up early is unpleasant and thinking on your feet on a busy mkt can make or break it for you.

    Truth is trading can be taught and an average person can become a successful trader, however trading is not suitable for everyone, especially if you are not willing to work really hard, while enduring abuse from the markets, clients, colleagues and even yourself!

  22. @the fake AliDesai – don’t worry kid you will get a break soon. I too used to wish that worked in a prestigious role like settlements. Now, I live and work in a small provinicial town which gives me plenty of time to snipe at idiots like the author of this article and respondents like Alex who despite having had a fortune spent on their education cannot tell the difference between “goes” and “gores”. sigh.

  23. Even if you try to make us believe that it’s hard, please remember that when you trade it can go either up or down, nothing else. So if you flip a coin you will actually do as good as most traders do. Not that hard if you compare with, let’s say, a movie director who has tousands of possibilities for evrey single shot… Sad but true

  24. It’s obvious the author & is not a trader. The trading floor is far different from what hollywood portrays so if you got your vision of trading/FO from Gordon Gekko, you are dead wrong!!

  25. This’ some hilarious sh*t!

  26. well fair enough, I open my own trading account and so far have not been blown to smithereens. I made 1400 today. Not bad when people make that in a month.

    Trading in a psychological and calculated speculative guess. off course taking economical but more importantly technical analysis into consideration. In summary you win some you lose some.

    It takes a few months of experience, discipline and most importantly an opportunity to network with people of the same mindset.

    I know I can be successful at trading and my account balance is proof of this.

    However I am still a small fish one day tho… one day.

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