I am currently a graduate student at a top US university (private, non-ivy). I was wondering what particular skills and classes would be looked upon as most helpful when applying to prop shops post graduation- programming? mathematics? economics? My program is in quantitative finance/risk management and I have the opportunity to take a few other graduate level courses that are quantitative based. Also, in terms of programming skills, what types of languages do most firms like to see for incoming traders/recent grads?
Education to prepare for trading career
- Thread starter 2Rip764
- Start date
Hi,
If you graduated on a program that deals with quantitative finance/risk management. Then you can have a bright future in stock trading. If I were you, I will start reading <a href="http://www.stock-trading.me/2008/03/stock-trading-101-basic-definitions/">stock trading 101: Basic definitions</a> and terms which are important. Having strong knowledge on risk and financial management is very useful as a trader, because money management is often a factor of success.
You can even blend your skills. If you have programming skills, then you can use that skill to develop a trading system or a system that do back testing of historical data and assess results. Few people can do that and you have the edge whether you are working for yourself or for a company.
With respect to programming that relates to development of trading system, I see several systems develop in C++ and Java, so if you know those languages very well, then having a career in trading might suits you. Good luck!
Going Into Wall Street
by John Train
I am frequently asked about the best background for the investment business. To start with, I am quite sure what it isn't : majoring in economics and then entering Wall Street. That's like recommending that an aspiring author should go straight from college into writing, or that a future saint should study theology and then enter church administration, or that a budding Cassanova should start with a doctorate in anatomy. In all these matters one needs first to know the world have practical experience. You invest in specific human operations--manufacturing, retailing, banking, technology--a different affair from building theories out of figures.
And economics, like weather prediction at the turn of the century, is still a proto-science. It may become a real one but does not yet meet an important test of science, namely, that it can be used as a predictive tool. Basic questions still mystify the experts. Nobody predicted the huge boom of the Reagan years, when industry grew by an amount equal to West Germany's entire economy and the stock market tripled. Nobody seems to be able to predict the price of gold, or what a higher yen will do to our trade with Japan. Most of our basic economic statistics are misleading, including unemployment, poverty, homelessness, and the federal deficit. George Soros, today's greatest investor, was trained as an economist but decided that classical economics can't explain the stock market. Warren Buffett, another great, not only avoids economic formulas but says that he does not even use a calculator. He examines companies, beginning with the people and the impregnability of the firm's niche or "business franchise." When I asked Peter Lynch, who ranks with either of them, how much time he spends on economics, he replied, after some reflection, "A little less than fifteen minutes a year." So economics is not a particularly useful background for Wall Street
Investment success requires above all a knowledge of business, which must include the ability to read and interpret figures, the language of business; a feeling for how people function; and a wide and deep judgment of affairs in general. It is almost indispensable to have some personal experience of business operations, which is what investment is about; a share of stock makes you a small partner in some enterprise. Ideally, you should have worked near a company's decision-making level, but at least you should have spent time out in the operating world. A few years with a management consulting firm is an admirable background, since you are plunged into a variety of different activities. Above all, since most things don't work, you learn how matters go awry. (They probably wouldn't call in a consultant if there weren't problems.) So you see a lot quickly, as with battlefield medicine.
cont on link..
http://www.optimates.us/wallstreet.htm
by John Train
I am frequently asked about the best background for the investment business. To start with, I am quite sure what it isn't : majoring in economics and then entering Wall Street. That's like recommending that an aspiring author should go straight from college into writing, or that a future saint should study theology and then enter church administration, or that a budding Cassanova should start with a doctorate in anatomy. In all these matters one needs first to know the world have practical experience. You invest in specific human operations--manufacturing, retailing, banking, technology--a different affair from building theories out of figures.
And economics, like weather prediction at the turn of the century, is still a proto-science. It may become a real one but does not yet meet an important test of science, namely, that it can be used as a predictive tool. Basic questions still mystify the experts. Nobody predicted the huge boom of the Reagan years, when industry grew by an amount equal to West Germany's entire economy and the stock market tripled. Nobody seems to be able to predict the price of gold, or what a higher yen will do to our trade with Japan. Most of our basic economic statistics are misleading, including unemployment, poverty, homelessness, and the federal deficit. George Soros, today's greatest investor, was trained as an economist but decided that classical economics can't explain the stock market. Warren Buffett, another great, not only avoids economic formulas but says that he does not even use a calculator. He examines companies, beginning with the people and the impregnability of the firm's niche or "business franchise." When I asked Peter Lynch, who ranks with either of them, how much time he spends on economics, he replied, after some reflection, "A little less than fifteen minutes a year." So economics is not a particularly useful background for Wall Street
Investment success requires above all a knowledge of business, which must include the ability to read and interpret figures, the language of business; a feeling for how people function; and a wide and deep judgment of affairs in general. It is almost indispensable to have some personal experience of business operations, which is what investment is about; a share of stock makes you a small partner in some enterprise. Ideally, you should have worked near a company's decision-making level, but at least you should have spent time out in the operating world. A few years with a management consulting firm is an admirable background, since you are plunged into a variety of different activities. Above all, since most things don't work, you learn how matters go awry. (They probably wouldn't call in a consultant if there weren't problems.) So you see a lot quickly, as with battlefield medicine.
cont on link..
http://www.optimates.us/wallstreet.htm
Quote from nazzdack:
Timing is more important. To enter the "business" in the middle of a bull market is best.
Truth. I know a guy who is due to make managing director at a mid tier firm....never went to college. Got in the biz at the perfect time and worked his way up.
To the OP. Head over the nuclearphynance. This place is not for you. They can point you in the right direction.
IMHO . . . a business background is essential with a concentration on economics, add in a little Physics, as much "Logic" and then "Problem Solving" courses as you can handle.
Learning to "think for yourself" and to self validate all information is critical and that is something that is not taught in school in general. Most classes are geared toward following the inconsistencies which are the mistakes of others and that is the fundamental basis of what is wrong with the trading environment as a whole.
Learning to "think for yourself" and to self validate all information is critical and that is something that is not taught in school in general. Most classes are geared toward following the inconsistencies which are the mistakes of others and that is the fundamental basis of what is wrong with the trading environment as a whole.
Math & Quant is what is needed to design complex models that attempt to beat the market just to blow up when an adverse effect happens.
Prop shops, that is REAL prop shops & desks have been leaning toward Math majors from top shops. Quantitative Finance is so-so and Risk management caters moreso to portfolio management rather than trading.
My suggestion is to actually look through trading job ads and make your own analysis. A lot of shops are building black boxes and designed mathematical models to extract profits. Some are focused on HFT, even though it is under scrutiny. Also, take a look at some options firms, they want people who are quick with numbers and can properly price options, as well as hedge risk, which is math oriented.
