What should I do to become a professional trader?

[rohan2008]

Hey there!
I'm a first year student of finance and accounting. I chose this degree because I want to work in the stock market, but most of the jobs require maths, physics or engineering knowledges.
I want to be a trader, I don't want any other job related to the world of the finances, so for me is very disappointing to see this.

What should I do?

Thanks.

Steps to become a professional trader:
1. learn trading (this takes quite some time)
2. Identify the right trading strategy you like (this takes time)

you now have two options (either or):
a. Learn to master your emotions and trade manually (this takes quite some time)(
b. Learn programming, develop a trading system around your strategy (atleast 6 months - 1yr effort)... don't underestimate this; this is a very serious effort

As you see, all the above steps takes time and in my experience you won't get there by working 24x7 towards it. Learning trading is a slow process from where you are... atleast thats how I see it. May be some else can differ with me on this.

My 2 cents: Learn programming and get a software job first... there are tons of jobs out there. Once you are on a job, you can start working towards becoming a professional trader... it can take a few years for you to get there and having a paying job does not put you in a desperate situation to become a 'profitable' professional trader quickly.

 

[Georgii]

The problem these days is that institutions want people with sharp math skills in order to kill it with derivatives (esp. options), which have become a critical money maker. Does that mean you need to know math or programming to successfully trade? Absolutely not.

Ask any of the traders here who trade off of price action technicals. What math do you need to know? Can you measure the size of the range? Can you measure the size of the last leg of the trend? Do you realize that if you're entering long at 1500.25 and your stop is at 1498.50 you're risking 1.75 pts on the ES which means $87.50 per contract? It's all add, subtract, multiply, divide stuff, and if you can't do that in your head there's always a calculator.

Probability is also a simple matter: 60% correct on a 1:1 risk reward works. 50% correct on a 1:2 risk reward also works. Sample size below 100 trades? That may not give you statistically significant results. You want to mess with confidence intervals? A quick read of a chapter or two and then go on the internet to find templates or do it in excel. That's about all you need to know, really.

I really laugh when I hear all this baloney about 'you need to be good with numbers' to be a trader. Sadder still is it might have turned some people off to trading for no good reason.

 

[xandman]

The OP wanted to be a "professional" trader. Not some guy who punts forex in his underwear.

A high level STEM graduate degree from an Ivy League school is a good start. However if you research the recruiting calendar of some schools, you will know that they sometimes fish around the lesser schools.

If you want to break into a top firm with a lesser degree, it might be become a glorified clerk or low level programmer. Make connections inside the firm while you go to graduate school. Other than that, stop watching Hollywood to give you false hopes.

It is a very difficult field to get into, most ( yes, even pros) wash out after a few years with little skills developed for most real jobs.

 

[Georgii]

I think a professional trader is someone who can make money from the markets, which is what a firm hires you to do or what you as a sole proprietor can make a living doing.

If you have a profitable track record and fit with a fund's objectives, nobody's going to make a big deal if you can't talk about Ito's lemma during an interview. Put another way, there are far more PhDs that can talk about Ito's lemma than there are profitable traders. The problem is when you're starting from zero and want someone to pay you to learn to trade. That's basically where the higher education and math play a big role. But I'd honestly be surprised if someone who had a solid performance on their account was asked silly math questions during an interview.

 

[xandman]

Now when we talk pro, I am talking ex-investment bank prop desks or hedge funds with serious coin. Not a bunch of brokers who hung up a "prop" shingle.

Walking into an interview with your brokerage statements is a pipe dream. Has anybody ever been asked for brokerage statements in a job interview?

If you don't get laughed out of the office for bringing statements.You will be looked at as a statistical anomaly that is never to repeat itself. If in any case that you can produce those incredible statements, what are you doing at a job interview?

When a trading firm hires these Ivy League STEM guys, they are looking for guys who can learn really fast and not be bogged down with the maths because there is just so much of it. STEM provides the foundation for further research in looking for an edge. There are interview guides for traders. And yes, they are full of silly math questions. Simply multiplying 2 digit numbers in a split second is an incredible asset. But that is for us slower guys from Chicago.

Nobody cares to teach you how to make more money, they can just trade bigger size.

 

[Georgii]

Walking into an interview with your brokerage statements is a pipe dream. Has anybody ever been asked for brokerage statements in a job interview?

Sure. If you say you're a profitable trader and you want to manage someone's money, the hiring manager would be a real idiot for not asking for some proof.

If you don't get laughed out of the office for bringing statements.You will be looked at as a statistical anomaly that is never to repeat itself. If in any case that you can produce those incredible statements, what are you doing at a job interview?

Trying to manage a bigger book? Getting base + bonus and health insurance? Could be any number of reasons.

When a trading firm hires these Ivy League STEM guys, they are looking for guys who can learn really fast and not be bogged down with the maths because there is just so much of it. STEM provides the foundation for further research in looking for an edge.

I wasn't implying that math is useless in developing an edge, but it's not a necessity by any means. There are lots of people on this forum who aren't 'Ivy League STEM', who are making way more money trading than 'Ivy League STEM', without the 'Ivy League STEM' student loans to boot. And there are many 'Ivy League STEM' hires who can't produce any coin and get fired. At least half according to statistics, and that's at the top places with superb resources.

I'm not knocking institutions who do stat arb, HFT, and mess with derivatives. Those are their strategies and it works for them. But it's silly to assume that you HAVE TO BE 'STEM' and Ivy League to be profitable in this business and 'trade serious coin'. Just read any of the Market Wizard books and ask how many of those people are 'Ivy League STEM'.

 

[wouter]

How do you become a successful trader without math?

You don't need math to be successful, sure you need to be able to add, subtract, multiply and you really don't even need to know how to code. You only need to spend 10,000 hours looking at charts according to some guy who wrote a book. He is not too far off except for the following point.

Seriously though, the ABSOLUTE most important thing you need to find out to know whether trading is for you is whether you have the mental make up for it. If you are like I used to be, ADHD, unfocused and unaware of yourself and how you act then trading is not going to pay off for you and become an exercise in frustration. Read the psychology books first before anything else. Setups are useless if you can't keep your self together when under pressure and believe me, there is serious pressure in trading. It is not at all a FUN job as in "ladida I am having a great time just pushing buttons and the money comes rolling in" It takes an enormous amount of work to become proficient at reading charts - pretty much reading 10,000 charts actually and then you still can't trade if you don't have the mental make up. Didn't I say that already? Yep, because that is THE sticking point for most people and it is expressly the one you cannot very easily just go learn by reading books or studying or in college. You have to look deep in your soul and your personality and you will have to FIND and FACE you demons. It's painful and scary. But once you do and you can become truly aware then you can gain control of your actions and those actions are what make you the money. What happens on the screen has nothing to do with the money you make. Great market days, easy ones, hard ones, slow ones, it does not matter. It all depends on how you act. Note I did not say re-act, that's exactly what you do not want to do. I saw a professional trader who has won three trading competitions miss a setup and then re-act to that and blow the next trade just because he was no longer in control. You MUST be in control of yourself and your mind or the market will eat you up. Can you sit for an hour and not take a trade because your setup is not there? If you can't you are not in control. I sometimes end trading with no trades simply because what I needed to see was not there. Sometimes I am not really "there" so then it's the same no trades.

Don't worry about math and all that, I'd rather hire a history buff who has IT than a quant who does not have IT. IT being what I described above. The more demons you have the harder it is going to be for you.

 

[Johno1]

In Finances and accounting we study maths, it's not the main subject but we do it too.

Sorry to mention this, one extremely successful trader at a prop firm does not know how to read, nor write( yep they exist!!!). So much that he hires a chauffeur to drive his limousine ( does not have a driving licence). But for sure he knows how to pull money from the market.
He is ashamed of his "fault", and thus has never taken the step to learn to read/write.
But good for him, as one millionnaire lost all his fortune just after learning to read/write
( and rebuilt it using his experience). So best for him to keep the money and the "illiteracy".

To the thread started :
* enjoy your education : any subject as long as you really enjoy it,
so as to develop your mind ( concentration, critical thinking, analytical mind,...)
* keep practicing trading with topstep trader
* keep an online trading journal at ET of your progress

If you want to get a job in a medium to top flight organization then you are going to need maths/science /IT major. On the other hand if you are happy to be a private professional investor(don't delude yourself about being a trader) then formal education is irrelevent. I left school at 12yrs old and then went back and did a Business Degree as a mature age student in my early 20s, that did nothing to help me with the markets, this I learn by self directed study, sadly all too often misguided/ill informed. Perhaps a mentor might have helped but as the saying goes "you can't put an old head on young shoulders" so who knows.lol What set me apart was a high IQ and an affinity with maths and science and a lot of study and pain. I am consistently successful in the markets these days, this is how I earn my living. So to me the main ingredients to my success are natural aptitude, hard nosed business skills learned thru the school of hard knocks and a high pain threshold.
I wish you the best of luck in the future.
Cheers John

 

[SunnyIsles]

Phone book

 

[istoptime]

Some joker on craigslist said he can make 20% with no downside. I told him i had 500k. he was so happy and talked about all the money he would make. I asked for a few years of brokerage statements. crickets.

You need to be different, special, unique to make it. Either have designed a crazy algorithm and for some reason can't use it yourself, or from the best of the best schools. nobody wants average. nobody wants a joker who says "triple top, so i sell here...and buy here." that is laughable.

but you have to make money, or add so much value from the math side that they think you will add value in the future. making money > telling a guy you can handle your emotions in an interview. So either you already know you are special, or you have a clue what you need to do.

if all else fails, try to network with the super rich. go spend a few months in some rich area and get people to like you. this might not work out in the long-run, but better than nothing. i've seen idiots network with huge players and get six figure salaries at the age of 23.