thepoliteone
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DazKem,
Not much help I'm afraid - I spoke to my contact but the story he gave me was that the guy was made an offer to be an assistant trader in order to stop him quitting the bank...
I would recommend what everyone else has said, use initiative and a lot of hard work. If possible get some books on trading (there's good ones in the bookshop on t2w) and read them on the way to work and in your breaks if possible, getting chumy with the right people might help but very difficult to get the right people!
Also, I would wonder if your boss would be pleased if you went to him and asked for a different job - better off talking to HR instead? Do your homework first though
And lastly - best of luck to you!
-TPO.
Not much help I'm afraid - I spoke to my contact but the story he gave me was that the guy was made an offer to be an assistant trader in order to stop him quitting the bank...
I would recommend what everyone else has said, use initiative and a lot of hard work. If possible get some books on trading (there's good ones in the bookshop on t2w) and read them on the way to work and in your breaks if possible, getting chumy with the right people might help but very difficult to get the right people!
Also, I would wonder if your boss would be pleased if you went to him and asked for a different job - better off talking to HR instead? Do your homework first though
And lastly - best of luck to you!
-TPO.
Investment Bank versus Arcade
Socrates,
what are the advantages / disadvantages of an arcade over an investment bank?
If you are with an IB but you have no chance to get into trading (=market making) in the next 3 years, wouldn't it be a more straightforward way to start with an arcade and then move into prop trading? Are there any problems to get your experience recognised or something?
Thanks.
Socrates,
what are the advantages / disadvantages of an arcade over an investment bank?
If you are with an IB but you have no chance to get into trading (=market making) in the next 3 years, wouldn't it be a more straightforward way to start with an arcade and then move into prop trading? Are there any problems to get your experience recognised or something?
Thanks.
SOCRATES
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The problem with arcades, if what you mean by an arcade is a prop firm, is that they are interested in turnover, because that is how they derive their fees. Obviously the greater the turnover the candidate can generate the more valuable he becomes to the prop firm. Now what happens is that these people in prop firms are expected to deal in size and at the same time do a lot of turnover. Some people I talk to, and one in the US particularly comes to mind, tell me that they are expected to do up to and over 1000 trades a day ! Their "stars" do this in a manageable size, say 20 -40 contracts in a liquid market as this size is not sufficiently large to disturb the market they are operating in. But the risk is huge for the prop firm, because all it takes is for an unexpected sudden violent movement to occur and they are up a gum tree, as a consequence of what their people are really doing is scalping for a point or two as the operating costs are very low. Now the added disadvantage is that there is no significant training available for them. The prop firms do not train their people to trade, they just put tnem on to scalping with tight stop loss rules and hope for the best. This is no way to evolve as a trader, because the aspirant is only going to learn to smash and grab, smash and grab, but not the underlying knowledge and skils required of a fully fledged dealer, which is a totally different proposition. I had a friend at The Bank of England who told me the Bank took nearly 4 years to train a forex dealer properly. You can see that to go for an investment bank is a better proposition as they are likely to offer ongoing training and proper supervision, whereas in a prop firm this is not the case, as in a prop firm, provided the trader does not make a "mud pie" he is left to his own devices. If I were in your shoes I would do everything to get into the investment bank scenario. This is because later on the knowledge and experience you will have gained will be invaluable, all of it, even if you just get your foot in the door as a juniorto start with. That is exactly what I did many years ago, I went on the floor of the London Stock Exchange not for what I was being paid, but just to get the knowledge. What I was able to observe and learn in there has been invaluable to me all these years. Investment Bank, definitely. Go for it. If your current one will not help you, find one that will, your time is valuable to you, do not waste it by applying misplaced loyalty.
Dazkem and others I have worked in banks etc. I started in the back office and wanted to move into trading but it was pretty impossible. I moved to an arcade to learn and then the investment bank had an opportunity and I managed to get back in. They were impressed that I had backed myself at the arcade.
Sadly the story is not all love and joy as when hard times came about they got rid of me sooner than you can stay investment bank.
I would sum up with two things to bear in mind:
1) It is very difficult to move from back office into it, only a few manage it but those that do have generally expressed a keeness over a number of years and eventually get a break. Usually they have had to work very hard and impress people. I had to leave and got lucky.
2) Trading in a bank isn't all that its cracked up to be. There are different pressures and sometimes you don't feel sure you are making your own trading decisions of being influenced. It took me a long time to really start to trade the way I wanted to and by then it was too late.
Feel free to pm me with any questions.
Sadly the story is not all love and joy as when hard times came about they got rid of me sooner than you can stay investment bank.
I would sum up with two things to bear in mind:
1) It is very difficult to move from back office into it, only a few manage it but those that do have generally expressed a keeness over a number of years and eventually get a break. Usually they have had to work very hard and impress people. I had to leave and got lucky.
2) Trading in a bank isn't all that its cracked up to be. There are different pressures and sometimes you don't feel sure you are making your own trading decisions of being influenced. It took me a long time to really start to trade the way I wanted to and by then it was too late.
Feel free to pm me with any questions.
SOCRATES
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Gamma, I understand perfectly the sort of pressures and controls imposed, but it would be useful for you tell him in your own words rather than me talking on your behalf, so that he gets some realistic idea of the kind of harnessing he can expect.
I'm really sorry for what happened to you Verno, I hope you are ok now.
What I wonder is what the upside with prop trading firms can be. They say they offer a lot more upside than IBs, nevertheless as much as I know you can make a lot of money with an IB (base plus bonus) and I doubt a senior prop can make more than a senior dealer.
I would also like to ask you, how many contracts were you allowed to trade per day, were your stop losses tight. Do you think it is duable to trade, obey their rules, make money and cover the costs? Do you also think the experience and teaching are worthwile?
Thanks a lot.
What I wonder is what the upside with prop trading firms can be. They say they offer a lot more upside than IBs, nevertheless as much as I know you can make a lot of money with an IB (base plus bonus) and I doubt a senior prop can make more than a senior dealer.
I would also like to ask you, how many contracts were you allowed to trade per day, were your stop losses tight. Do you think it is duable to trade, obey their rules, make money and cover the costs? Do you also think the experience and teaching are worthwile?
Thanks a lot.
Gem, I will try to answer your questions (I take it you mean arcade when you say prop shop) and I will add this, I have considered many times going back to an arcade but I am trying to develop a longer term trading strategy over the next 5-15 years that is really robust and that I can then retire on. I need a regular income to service a mortgage etc.
At the place I worked (and it varies massively from place to place) they took on 9 people to teach. To be honest the teaching was useless on the whole. All the traders had their own methods and it was more useful speaking to them and asking them what they look for. A very simple setup pattern was probably the most effective for me. Apart from that those that did better were the ones who did lots of reading in their own time. (Market wizards, pit bull, technical analysis books etc).
I found the best way to learn was to try lots of different methodologies and work out which suited my style best (ie if I want to make 2 ticks then MACD and stochastic divergence aren't really for me. Simple price action and chart setups worked best). In these arcades its all about probability. you trade areas and setups with higher probability of things happening.
In terms of money I would say there were 2-3 people in our arcade making over 1million per year but on the whole most people struggled and probably made more like 50-100k. At an IB if you are a Managing Director you are probably taking home over 1mill but generally have worked your **** off for 10 years. Below that it varies on products etc.
At an IB you also work for someone else but at an arcade you work for yourself.
For me I enjoyed the arcade and made money but I expect alot from myself and put huge pressure on myself every day (as you are trying to make your salary) and I think that is why long term it is not for me. Also it can be very boring at times.
Stops are generally 3 ticks in most arcades on volatile markets (bund, dax etc). One final comment if you make money you can write the rules in these places, if you don't and are losing their money then they will give you strict rules to adhere to.
Hope this helps and actually makes some sense
At the place I worked (and it varies massively from place to place) they took on 9 people to teach. To be honest the teaching was useless on the whole. All the traders had their own methods and it was more useful speaking to them and asking them what they look for. A very simple setup pattern was probably the most effective for me. Apart from that those that did better were the ones who did lots of reading in their own time. (Market wizards, pit bull, technical analysis books etc).
I found the best way to learn was to try lots of different methodologies and work out which suited my style best (ie if I want to make 2 ticks then MACD and stochastic divergence aren't really for me. Simple price action and chart setups worked best). In these arcades its all about probability. you trade areas and setups with higher probability of things happening.
In terms of money I would say there were 2-3 people in our arcade making over 1million per year but on the whole most people struggled and probably made more like 50-100k. At an IB if you are a Managing Director you are probably taking home over 1mill but generally have worked your **** off for 10 years. Below that it varies on products etc.
At an IB you also work for someone else but at an arcade you work for yourself.
For me I enjoyed the arcade and made money but I expect alot from myself and put huge pressure on myself every day (as you are trying to make your salary) and I think that is why long term it is not for me. Also it can be very boring at times.
Stops are generally 3 ticks in most arcades on volatile markets (bund, dax etc). One final comment if you make money you can write the rules in these places, if you don't and are losing their money then they will give you strict rules to adhere to.
Hope this helps and actually makes some sense
Thanks buddy,
another question would be, how many contracts did you trade at once, and how many trades did you do per day as a junior. Could you please more specific on this details (for instance 5 DAX contracts plus 10 Bund Futures etc.). This would help a lot.
Cheers.
another question would be, how many contracts did you trade at once, and how many trades did you do per day as a junior. Could you please more specific on this details (for instance 5 DAX contracts plus 10 Bund Futures etc.). This would help a lot.
Cheers.
SOCRATES said:
There is a difference. The places are not the same.
An arcade requires the trader be self funded. He also pays for all costs such as seat, data, news, quotes etc. The trader receives 100% of his profits ( minus costs). They offer no training.
A prop shop funds the trader 100%. The trader shouldn't have to put a penny down. The trader receives a cut of his profits. They may offer training to a grad.
There is also a model where the trader may receive partial funding - he puts down £10k, and so does the arcade. However, guess who takes the losses, and still has to pay for equipment. Again, this is more of an arcade model, with the partial funding really just a ploy to make more bums on seats. However they market themselves as a prop shop - which is wrong.
But in general you are right. Smash n grab all the way - volume being the name of the game (more so at an arcade, as they will typically be getting a peny or so from every trade.)
Hope that helps.
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