Building a Trading Team

Quote from Colonel_Blood:

I still feel that getting too technical with multiple tests is not necessarily the way to go, although if it works for you or your company then go for it.

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You can look at performance only and disregard other measures from testing but this does not get you an accurate picuture of the candidates adaptability. When you hire real permanent employees - not people putting up their own money or contract temps - the stakes are a lot higher. I dont want to hire people I will have to fire later. In our case we need people that are very smart and in our book that means that they have the ability to adapt and think creatively to solve new problems that come along..... We think standard IQ tests are shams - as well as the newly popular "puzzle" tests which we also think are worthless - and over time we have developed very accurate testing regimes that have excellent predictive value.

Bottom line: spend more time on the hiring process and in the end you will get a much better team.
 
..a very interesting thread...probably the most interesting to me as we are going through this process right now.....all these points are valid and very helpfully. I have to also second the idea mentioned of "continuing" the interview process and realize that some people will NOT succeed.

I've seen that happen personally and it's not a personal thing just making smart decisions for your "fund' or "firm".......excellent thread.

rttrader -
 
Quote from CalTrader:



In our case we need people that are very smart and in our book that means that they have the ability to adapt and think creatively to solve new problems that come along.....
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Cal

You hit it on the head there.

If you look for people who are able to ADAPT and think CREATIVELY chances are you've excellent people on board.

The trouble is Cal I reckon it's taken you a few years of tweaking the interview and application process to get it right. But then that's business isn't it.
 
"Sometimes wonderful people with great personalities hired for a position that ultimately sets them up to fail."

Simple as not wanting to hire a loner to be a cold call sales person. The desired results will differ from the desired goal.

Personally I hate taking test! However these test allow me to make a better call without emotions clouding my decision as to where the individual being interviewed will best fit in my company or if they ultimately wouldn't fit in. No reflection on the individual in question, just allows me to make the right decision for them and me. From the school of hard knocks it's cheaper in the long run to spend the money on the test upfront than take loses on the backend.


Good luck to all in setting up your trading groups.
Bsulli
 
thanx so far for the responses.

I try to answer to all of you in this post. If I forgot something please let me know.

Over the past two years we have built an internal training program and we also have tested it. So to answer Colonel_Blood's first question we do support an education. We have four different trading styles we teach with different markets and all the traders have to go trough this program, but we encourage them to extend their knowledge and combine it with previous experiences.
One issue we are looking forward to do with the team is that the traders exchange their knowledge and experience from day to day.
And no, we are not looking for traders that have to follow a systematical approach. Our philosophy is discretionary trading. This makes the discussion about the selection process of traders so important... and that's why I came here to ask for others experience.


To TraderNYC:
Don't worry, we have good Alliances for the Sell-Side but that's not what I came here. Here I only focus on the team building topic.


Runningbear:
Youngest Child Theory... we will certainly focus on psychological issues. Such as family background, etc.. just don't know yet what could be extensively relevant for a traders profile.


CalTrader:
Background investigations sounds very important... will certainly take that into focus. And not trackrecord.. I believe more important is private background. You mention that there is little room for Error. I try to build a control mechanism for limiting this risk... we will monitor traders in their first few month and get to know their trading behavior... then we try to give them exact rules for their weaknesses. I'm interested if you are already using something like that.

"we need people that are very smart and in our book that means that they have the ability to adapt and think creatively to solve new problems that come along" (CalTrader)

This is also imo one of the most important elements a trader must have. But my question is how to determine if someone is able to adapt and think creatively in real life? - important point, thanx CalTrader. I also don't like standard IQ tests.

I don't expect any insight from your testing regimes that you have developed but maybe you could provide some general info of what the most important parts are. Would be very interesting indeed.


Walther:
Until right now I have defined that the background must have something exceptional or outstanding. This does not only focus on the educational part!


Topten:
Don't worry topten. I'm not here to sell anything or recruit traders. I'm here to discuss this topic only.


Bsulli:
Thank you for the link. Looks interesting.


So far the input has been great. Thank you all. CalTrader mentioned some very interesting points and i hope that he will provide with some more of his knowledge.

Something else regarding that topic is how to manage the team during the first period. Colonel_Blood already mentioned how he would do it with hiring 10 and expecting 2to3 to break even. Colonel, if you have experience with that, could you share some of your experience with that.


cycletrader
 
Quote from Colonel_Blood:



Cal

You hit it on the head there.

If you look for people who are able to ADAPT and think CREATIVELY chances are you've excellent people on board.

The trouble is Cal I reckon it's taken you a few years of tweaking the interview and application process to get it right. But then that's business isn't it.
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It takes experience and mistakes to develop a process, be it an effective hiring process or other business process. In earlier times - when I was not able to prevail by virtue of my position - I often had to compromise and yield to other peoples viewpoints with which I did not necessarily agree. Some bad hires and partners came in on these ventures which I had to accept from others. In the end they did not sink the business but I learned that compromising on personnel decisions and business partnering decisions are the worst mistakes you can make in business.
 
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