career paths of automated trading system developers

H

hfoptimizer

My story so far...

I develop automated trading strategies for a company that will remain anonymous. Out of respect I will avoid saying or suggesting anything negative except of course to acknowledge there are problems that have caused me to threaten to quit twice and brings me to this post.

I've developed automated trading systems for about 10 years, initially on my own, then for an employer later. I've now reached a high enough level as an system developer where profitability is no longer the only major issue. I now feel that honesty, trust and doing things right matter as least as much. I now know that developing profitable trading systems is actually a scientific process. Of course there are many do's and dont's, one must be pragmatic and motivated with a decent software and math background. Given all that, automated trading systems can be done with surprising ease and efficiency. I've been told I'm the most efficient and productive system developer at my company. My trading strategies from several years ago built the track record that now sustains the company.

I run a computing cluster simulating billions of trades per second testing 100s of different strategies per second and always push for more efficiency. I also push to build a stronger team and hire some top-notch software engineers because I know the value of such people and because the codebase is becoming too difficult for me personally to manage. Can't utilize CPU resources properly without good people writing good algorithms.

I could go on. But most will get the point. Without going into negative details it is becoming quite clear I should quit and start my own operation as I had years ago. I find myself thinking about business strategy and building better morale, trust and a solid team at least as often as I think about designing a better trading system analysis framework.

Anyone else in a similar situation?
 
Quote from hfoptimizer:

Out of respect I will avoid saying or suggesting anything negative except of course to acknowledge there are problems that have caused me to threaten to quit twice and brings me to this post.
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sh*t or get off the pot. if you are as good as you think, you can easily get a job at any trading firm or get backed by a firm to run you strategies. i dont know what the issue is here
 
Quote from hfoptimizer:

My story so far...

I develop automated trading strategies for a company that will remain anonymous. Out of respect I will avoid saying or suggesting anything negative except of course to acknowledge there are problems that have caused me to threaten to quit twice and brings me to this post.

I've developed automated trading systems for about 10 years, initially on my own, then for an employer later. I've now reached a high enough level as an system developer where profitability is no longer the only major issue. I now feel that honesty, trust and doing things right matter as least as much. I now know that developing profitable trading systems is actually a scientific process. Of course there are many do's and dont's, one must be pragmatic and motivated with a decent software and math background. Given all that, automated trading systems can be done with surprising ease and efficiency. I've been told I'm the most efficient and productive system developer at my company. My trading strategies from several years ago built the track record that now sustains the company.

I run a computing cluster simulating billions of trades per second testing 100s of different strategies per second and always push for more efficiency. I also push to build a stronger team and hire some top-notch software engineers because I know the value of such people and because the codebase is becoming too difficult for me personally to manage. Can't utilize CPU resources properly without good people writing good algorithms.

I could go on. But most will get the point. Without going into negative details it is becoming quite clear I should quit and start my own operation as I had years ago. I find myself thinking about business strategy and building better morale, trust and a solid team at least as often as I think about designing a better trading system analysis framework.

Anyone else in a similar situation?
More...

Interesting post.

Its different when you have to attract and pay that talent yourself. My path is similar except that I've concluded that it is better for me to simply assimilate what I saw in the belly of the beast and try to do all the work myself. I just can't pay all those guys I had at the firm. All I can take with me is some knowledge. It sounds you have a tight little unit of folks who will follow you out. The firm I worked for in Chicago had cherrypicking agreeements I signed along with the NDA and Arb agreements so they could sue under those circumstances. You seem like a focused person and perhaps the type that can pull it off. Good luck.
 
Quote from pennystocker:

Do guys in your positions get bonuses in addition to salary? You must rake in upwards of 7 figures+/year!!!
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Not seven figures here, even with bonus. Basically about 2x what I would make as an engineer. There are long hours involved so it isn't really even 2x.
 
Write a business plan and then implement it. After 10 years in the business, you should know all that detail in back of your your mind, all the various steps to strike out on your own. Really, it starts out as sitting down with an empty sheet of paper and a pen, and write out all the steps you need (in sequence). Got that? Good, that's your to do list.

And I would imagine that after working in the financial industry for 10 years, you would have the amount necessary to self-finance for quite a while (figure 2 years). 10 years even seems long, honestly.

I know ppl have founded very successful firms and only have worked in the business for <= 5 years. Those Peak6 guys, they started like 6 years after *graduating* college.

As some of you may know from here, I speak from personal experience, I have started and is still running my own little operation. And as a friend told me a long long time ago ('97, ha), the day you walk away from security of a job, and go start your own thing, that feeling, is simply the best feeling in the world.

Just do it, man.
 
Quote from 377OHMS:
Interesting post.
Its different when you have to attract and pay that talent yourself. My path is similar except that I've concluded that it is better for me to simply assimilate what I saw in the belly of the beast and try to do all the work myself. I just can't pay all those guys I had at the firm. All I can take with me is some knowledge. It sounds you have a tight little unit of folks who will follow you out. The firm I worked for in Chicago had cherrypicking agreeements I signed along with the NDA and Arb agreements so they could sue under those circumstances. You seem like a focused person and perhaps the type that can pull it off. Good luck.
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Yes similar backgrounds. I would not cherry pick my current co-workers. I really only need one good software engineer to help manage the codebase and strategy design/performance space. The rest can be done by me.
Quote from rufus_4000:
Write a business plan and then implement it. After 10 years in the business, you should know all that detail in back of your your mind, all the various steps to strike out on your own. Really, it starts out as sitting down with an empty sheet of paper and a pen, and write out all the steps you need (in sequence). Got that? Good, that's your to do list.
And I would imagine that after working in the financial industry for 10 years, you would have the amount necessary to self-finance for quite a while (figure 2 years). 10 years even seems long, honestly.
I know ppl have founded very successful firms and only have worked in the business for <= 5 years. Those Peak6 guys, they started like 6 years after *graduating* college.
As some of you may know from here, I speak from personal experience, I have started and is still running my own little operation. And as a friend told me a long long time ago ('97, ha), the day you walk away from security of a job, and go start your own thing, that feeling, is simply the best feeling in the world.
Just do it, man.
More...
I'm not sure what exact point you're trying to make regarding the numbers of years you cite. I started in ATS (automated trading systems) 10 years ago, but also worked in unrelated endeavors, including ownership with several employees under me. Altogether I've done 3 years ATS on my own and another 2 years ATS as an employee. The 3 years on my own were not very productive in retrospect. The other 5 years I was not active in ATS work. My current systems are pretty decent and currently generate a couple percent of the daily volume on one of the top 5 futures markets. Position sizes of 100s to low 1000s of contracts.
Quote from rosy2:
sh*t or get off the pot. if you are as good as you think, you can easily get a job at any trading firm or get backed by a firm to run you strategies. i dont know what the issue is here
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Rosy and Rufus: I appreciate your advice. However, the issue is not so much whether I can get a job or start my own company. The issue is finding a like-minded team to work with, regardless of whether I'm the employee, manager or owner. I've been in all of these roles and the real challenges are always the same: finding good people, trust, honesty and doing things right. If a good team can't be built, then obviously its time to strike out on my own. But I have no problem being an employee on the right terms with the right people.

Of course ownership can have advantages. But that's because typically owners believe they have a god given right to fuck the employees, even their best employees, especially when there's the financial means to do so. When the company is profitable (and without financial pressure) on the backs of the employees, and those employees have no exposure/leverage with regard to the customers they become expendible. I would love to work for an owner/manager that didn't do this, basically one that treats key employees like partners.
 
Quote from hfoptimizer:

... Yes similar backgrounds. I would not cherry pick my current co-workers. I really only need one good software engineer to help manage the codebase and strategy design/performance space. The rest can be done by me.
...
whether I'm the employee, manager or owner. I've been in all of these roles and the real challenges are always the same: finding good people, trust, honesty and doing things right. If a good team can't be built, then obviously its time to strike out on my own. But I have no problem being an employee on the right terms with the right people.
More...

You are (at least to me), slightly contradicting yourself. You initial post indicated that you are mostly a quant/strategist and developer, and now you want a (possibly new) software engineer, something doesn't add up in my head. You are talking like you want to build out at least 2-3 person team initially. And furthermore, if you have good people you want to work with, you would know them alrdy, instead of trying to find new ppl with entirely undetermined partnership chemistry. This makes no sense to me.

As some of you know, I was divisional cto at an investment bank, and then head of electronic trading at a Chicago based firm (and those who know which one, please keep it to yourselves). And like most managers, I really haven't wrote any serious code for 5+ years. What did I do after I struck out on my own? I wrote code, I wrote backtesters, I did it all. Since you have the experience, why not do it?

I hate to be hard on you, but I will. You sound like a team leader / mid-level manager who thinks you can do it all, but reality is, you have bought a lot into the "corporate" culture than you think, you starting to think you need a "fleshed out team" before you can accomplish anything. And yet you won't even consider bring any of your co-workers into your venture, which to me (as a former CTO), shows that you think your talents are "beyond" those of your co-workers (but you are not), when reality is, more than 1 of them can / will be useful, even if the firm is Fifth Third bank. Look around Chicago, every firm, even Margulis after Hull and GS, only had 1 person work for him for a few years. Every firm, DRW, Tradelink, Wolverine, either started with a single person, or a tiny of group of ppl who have worked closely together before.

Reality is, if you are truly passionate about your own ideas, and have the knowledge set to do it, you would have alrdy started the process. if you are still talking about building a good team of "unknown but exceptional talents", then you are not thinking about this right, and you probably can't do it.

Now how is that for a kick in the pants?
 
Quote from rufus_4000:
You are (at least to me), slightly contradicting yourself. You initial post indicated that you are mostly a quant/strategist and developer, and now you want a (possibly new) software engineer, something doesn't add up in my head. You are talking like you want to build out at least 2-3 person team initially. And furthermore, if you have good people you want to work with, you would know them alrdy, instead of trying to find new ppl with entirely undetermined partnership chemistry. This makes no sense to me.
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I think you're trying to read too deep here. I am a decent enough software engineer that I know full well what my challenges are. Thus I recognize there are software developers out there that would be quite valuable to have. One of my greatest technical challenges is organizing the trade logic engines, optimization strategies and parameter/performance sets into a more effective testing framework. I do a ton of automated strategy discovery and there is always room for organization, visualization and efficiency improvements.


As some of you know, I was divisional cto at an investment bank, and then head of electronic trading at a Chicago based firm (and those who know which one, please keep it to yourselves). And like most managers, I really haven't wrote any serious code for 5+ years. What did I do after I struck out on my own? I wrote code, I wrote backtesters, I did it all. Since you have the experience, why not do it?
More...

Like I said... I've been there and done that. Now I am considering going back out on my own.


I hate to be hard on you, but I will. You sound like a team leader / mid-level manager who thinks you can do it all, but reality is, you have bought a lot into the "corporate" culture than you think, you starting to think you need a "fleshed out team" before you can accomplish anything. And yet you won't even consider bring any of your co-workers into your venture, which to me (as a former CTO), shows that you think your talents are "beyond" those of your co-workers (but you are not), when reality is, more than 1 of them can / will be useful, even if the firm is Fifth Third bank. Look around Chicago, every firm, even Margulis after Hull and GS, only had 1 person work for him for a few years. Every firm, DRW, Tradelink, Wolverine, either started with a single person, or a tiny of group of ppl who have worked closely together before.
More...

Be as hard as you like. I love a good discussion. But you might want to avoid jumping to conclusions such as "You sound like..." This isn't a guessing game. You could simply ask questions. Fact is I have despised the corporate culture since college and only worked in companies where I reported to the owner/president. I don't want to bring my co-workers along because I know better people that have already expressed interest in working with me.

Reality is, if you are truly passionate about your own ideas, and have the knowledge set to do it, you would have alrdy started the process. if you are still talking about building a good team of "unknown but exceptional talents", then you are not thinking about this right, and you probably can't do it.

Now how is that for a kick in the pants?
More...

I do appreciate your kind movivational words but feel you are speculating way off the mark with statements like "unknown but exceptional talents".
 
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