how to become a trader??

I just got my masters in mathematical finance and eventually I'd like to become a trader....where do I start?

trade your own money or become a broker.

Unless you are Ivy league you chances are slim.

Also become a IT contractor(like I did) and work for firms like Robertson Stevens or others in NYC or Chicago. The IT conract is the best methods as you can make a little money - trade it and see for yourself if you are any good. No offense but you degree and schooling means squat. How much did you make since age 14 annualy. How about last year?

Its almost impossible to get a job in trading unless you start somewhere else (another department), you have the right connections, or you have your own money . I have applied at various firms , and just getting a response is a positive. BTW my track record is good ( as i turned a mock portfolio at now defunct marketplayer.com from 1mill to 200 mill in 2yrs)and an ET account from 10k to 350k , and even that wont get me an internship (i dont even want a salary) . as for my own money ,,, word of advice --dont over leverage on puts on co's that report pro forma as standard lol

What if, instead of you telling me what you wanted to buy and sell, at what price, and when, I told you I wanted to sell 1,000 shares of everything, now, and you had to tell me a price for every single thing where you could buy or sell, and hope to make a profit?


It's a totally different game. Working on a trading desk isn't predicting which direction something is going to go in from time to time. It's building a liquidity machine, out of customer orders, and customer relationships. And it's picking people off, with a smile.


If a customer comes along out of the blue and wants to buy a Chicago Option in XYZ instrument, that is what you are selling short. So you have to take your deck of existing unmet customer orders, and figure out how you can manufacture this option your customer wants, and where you can do it for a profit.


eLROY

Well you are referring to the other side of the market , where the market makers make the liquidity , those that match up buyers with sellers, or hedge the position (in options) . The majority of the profit in those trades lay on the spread, which is getting smaller now , and the selling of risk to the speculator.. so yeah you are right , but their are still those co's which trade on the open side , looking for appreciation or depreciation of the equity they have invested in .

I don't think there are any satisfied guys that are what you would call traders working today. Guys that are "traders" are almost all to a man looking just to find a way out on their own with their own bankroll. Trading someone else's money is just a holdover to get them some cash and angles to work. Traders that use other's money are under extremely tight leashes with miniscule limits. Imagine you work for say Goldman and their billions of dollars. Now you see a great opportunity in currencies, great right? Not really, they will put a limit on you that will make you laugh. Most set aside theoretical bankrolls and tell you to limit your exposure on these bankrolls to 2 or 3%. So if you hit a home run trade it looks great on paper until you realize they made more in 10 minutes just on the interest from their stock of T-Bills. Its pointless really, that is why there are few real traders that are working for the banks. Most of the traders are actually account traders making the trades that the banks and brokers require, then on the side they try to use their inside knowledge to trade their own accounts. Problem is that is risky too. Say you get active and start making money, well great. Problem becomes a big action day comes and the orders are coming non-stop and you see opportunities and risks everywhere. However your job is to trade the banks money, not your own so your money is greatly at risk at these very moments a ton of money is won or lost. These reasons are why if you really want the glory and the money, trade yourself. No guaranteed paycheck, no easy access to the info and insight you get with the bank...but no glory or riches either.


Best thing for this guy to do would have been save the money he spent on tuition and open a trading account...if trading is all he ever wished to do in the first place.

I wouldn't call the limits at Goldman or other investment banks laughable... good traders can still make several million or more a year. But you have a point, trading on the sell side is definitely different than on the buy side. You can still take fairly substantial positions but you have to cut your losses if they move against you.. you cannot sit on a losing position for long(a week is often considered long by traders).


The skills on the sell side are definitely different from buy side. On the sell side, a lot of it is managing risks and being smart about hedging. Buy side is more about taking views and being right. Your horizon is a bit longer, although many hedge funds move in and out fairly frequently.


If you want to get into trading, i would still advice to go to an investment bank(not that its easy). Given that you have a masters degree, fixed income derivatives is probably a good area. This tends to be much more technical and quantitative... good luck.