You have to have a quick mind to do that job. You have to be able to calculate cross rates in your head in seconds, doing a lot of arbitrage trading spot versus foreward. Most of those traders burn out within 5-10 years because they live the lifestyle and have no home life, they have money but no use for fulfilment.
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A job as foriegn exchange trader
- Thread starter drasfs
- Start date
Quote from RiceRocket:
You have to have a quick mind to do that job. You have to be able to calculate cross rates in your head in seconds, doing a lot of arbitrage trading spot versus foreward. Most of those traders burn out within 5-10 years because they live the lifestyle and have no home life, they have money but no use for fulfilment.
I thought I would expand on the lifestyle issue. It is usually expected for an IB trader to get to his desk at 6.30-6.45am, work until 7pm and then go out on the piss with clients/brokers/traders until the early hours of the morning. This extra, and expected, social activity generally happens three or four times a week.
This also takes its toll over the long term in respect of longetivity. The culture of the IB trader is to live very hard.
sccz97: Ok, so I should dismiss the 500k salaries that the website claims forex exchange trader earns after 5 years of experience , or draw the conclusions that there is a huge salary gap between USA and UK?
The big picture: Yeah, i guess that if you are going to get paid 500 000 dollar a year, you should perform as such as well. Well, if you could produce high returns, i can imagine that you would be attractive.....
The big picture: Yeah, i guess that if you are going to get paid 500 000 dollar a year, you should perform as such as well. Well, if you could produce high returns, i can imagine that you would be attractive.....
I think there is a lot of confusion here. We are making very broad assumptions with the term FX trader. Most FX traders that make the big bucks are FX derivatives traders. These guys make far more then that survey indicated. On the flip side, the FX spot guys don't make anywhere near that number. So if you average them together you probably get those numbers but you can't average them because they are two totally different professions. An FX derivatives trader has to be well versed in vanillas, exotics, and more importantly interest rate swaps. Most good swap traders make 7 figures. Although many banks now separate the swap guys from the vanilla and exotics desks.
For those of you not well versed in FX derivatives, it's one of the toughest skill sets to acquire. It not only requires a complete understanding of options, but also interest rates. Think of it this way, it's like taking the best bond option trader and combining it with the best index option trader. Keep in mind these are two totally different skill sets, so combining the two is not that easy.
If you can trade FX derivatives, you can trade anything in the world, both exchange traded and over the counter.
Anyway, just thought I would clarify this a little.
For those of you not well versed in FX derivatives, it's one of the toughest skill sets to acquire. It not only requires a complete understanding of options, but also interest rates. Think of it this way, it's like taking the best bond option trader and combining it with the best index option trader. Keep in mind these are two totally different skill sets, so combining the two is not that easy.
If you can trade FX derivatives, you can trade anything in the world, both exchange traded and over the counter.
Anyway, just thought I would clarify this a little.
Quote from drasfs:
Maverick74: Thanks for clarifying that. Im going to google on it now, but do you have any spontaneous facts on what the general requirements are, to become a fx derivative trader?
It's pretty tough. definitely an advanced graduate degree. The sales side of the business recruits from the Investment banking division which gets their pool of traders from the top MBA programs.
The derivatives guys come mostly from math and science backgrounds. Usual suspects are CalTech, MIT, Berkeley, University of Chicago, etc.
It's very hard to get on a good desk. Like I said, the job requires you to really be a stud in many different areas. You need to be able to price derivatives (math background), execute and trade them (usually athletic background) and be proficient in sales (president of a fraternity or other social organization). Very few people posses all three. If you have only one of these skill sets, you are not going to make much coin.
Quote from drasfs:
Maverick74: Well, it definitely seems out of reach. Im just studying economic now at a random uni. Wont come anywhere with that.
Sorry, not trying to be Debbie Downer here. Why do you want to work for a bank? You can make as much if not more money then those guys trading on your own. I'm not saying it's easy, but it's there if you want it.
Quote from Maverick74:
Sorry, not trying to be Debbie Downer here. Why do you want to work for a bank? You can make as much if not more money then those guys trading on your own. I'm not saying it's easy, but it's there if you want it.
Nah, i was just curious, and looking into possibilities as well. And yes, im doing some trading on my own, with improving results... But did you mean any specific kind of trading like forex exchange trading, or just trading in general terms?
Quote from Maverick74:
It's pretty tough. definitely an advanced graduate degree. The sales side of the business recruits from the Investment banking division which gets their pool of traders from the top MBA programs.
The derivatives guys come mostly from math and science backgrounds. Usual suspects are CalTech, MIT, Berkeley, University of Chicago, etc.
It's very hard to get on a good desk. Like I said, the job requires you to really be a stud in many different areas. You need to be able to price derivatives (math background), execute and trade them (usually athletic background) and be proficient in sales (president of a fraternity or other social organization). Very few people posses all three. If you have only one of these skill sets, you are not going to make much coin.
you forget one important factor that can help a large amount .... luck! The hedge fund I used to work for was mainly focused on convertible arbitrage. Not the easiest strategy to trade requiring a good grounding in the equitiy and fixed income space. However, one of the top cb traders now trading out of the hk office used to be the ceo's pa.