Quote from gmst:
12 yrs backtest is good. Your training as a quant and experience is useful. But you never traded - that is bad.
Fee free to papertrade and analyse for years but in reality there are just 2 ways to actually do it:
A) My Way or Highway - In this case, you go to your boss and declare you are not coming from tomorrow. You are going to trade your PA. You decide RESOLUTELY that you are ending your banking career and you are going to give yourself 5 years to succeed. Btw, 1 year will just not cut it. LOL. Everyone thinks in the beginning 1 yr will be sufficient to make it in trading. I actually know a guy who used this approach! Ex-MS and Goldy - but he has still not made it but it has been just 2 yrs.
Frankly, this is borderline insane way to do it. And the only real reason imo, to go this approach is if you can do 4x or more return per year on your starting capital and have at least 50k as starting capital. So, to gauge this - do this little exercise:
Tell us how much PERSONAL starting capital you can invest, how much leverage and how much DD you willing to accept if you leave your job and trade this for a living? Now use this number for personal starting capital and personal leverage you are comfortable with, compute the equity curve and I would also say post it here.
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Yes, the idea is not to make a living out of it with my capital.
Rather, in case, to build a small track record which hopefully would get me somewhere/someone.
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Anyway, for the sake of exercise:
In backtest, max drawdown was 400k, with average annual return of 700k. Assume a realistic drawdown of 600k, and that I am willing to accept 50% drawdown of my trading capital (which is quite aggressive, in non stretched situations I would assume 20%) and that I have 50k capital (possible), that's 30k, which doesn't make it too viable.
(in reality is not that simple because you scale your capital up/down with profits/losses, but well..)
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And 1 year is not the time I give my self to become a big fat hedge fund manager with my fantastic and definitive strategy, rather a time to understand whether I could make it.
I certainly expect (and hope!) to keep developing and improving my system and my approach as time goes by. And of course the 1year figure is just indicative.
And finally, I don't want to sound arrogant nor I know this guy you mention, but wherever I turn seems to be full of stories of ex GS people who don't make it, so I wouldn't take it as an example
(just kidding...I really heard a dozen of stories!)
Quote from gmst:
B) A more sane and more risk-adjusted ways to do this:-
Approach a good buyside firm like Millennium partners with your strategy. I heard they are always hiring on a profit share deal. Only problem you will face is that you do not have a live trackrecord. But if you know people there and can get an interview, I would say it is a good shot. Even if they don't hire you, you will end up learning something from the interview.
Quote from CT10Gov:
Quant trading is an actual thing. Just because your prop group doesn't do it, why not go look for another shop that does, be it sell side or buy side.
I agree that this a more sane approach (which doesn't necessary make it better though
).
Problem with it is exactly that I don't have a track record. So I would expect, at least, to be asked to give up the Intellectual Property...does anyone have experience on this?
Would it be different with a prop firm?
