Skip to main content

Industry Insights: What Does it take to be a Trader?

This week we learned about Trading, and in particular what it takes to "make it" as a trader. As usual, Daniel Robertson has provided the review.

7th Feb Trader 8

Andy Demi is a Reading alumni after graduating in 2003. After spells working at Deloitte and JP Morgan, he is now the head of the London Trading Group.

Andy provided a fascinating overview of trading as a career. Firstly he commented how it is often a misrepresented industry, characterised by films showing the more 'glamorous' side such as the Wolf of Wall Street! However the industry is a professional industry and one that is both competitive and pressurising to work in. If somebody doesn't enjoy high pressure competitive environments, Andy suggest roles such as analysts are require similar skills but with less pressure.

Good traders also have strong money management skills and risk controls - it's not just about earning returns! This is more important for independent traders who are reliant on themselves whereas in a firm there is a risk manager to monitor your performance. Other key skills for traders include quant skills (41% of traders have a quantitative education) and in the application stage around 70% of applicants can be filtered out based on numeracy tests.

In order to stand out, Andy believes applicants need to be unique, have an interest in financial markets and a proven track record (even if it is with a 'dummy' account), in addition to professional qualifications such as the IMC (which Andy felt was more relevant to trading than the better known CFA)

If Andy was starting out today in the industry, he would consider working for a hedge fund due to the flexibility to speculate in financial markets to generate a profit, however these are very competitive positions to secure. Therefore, if someone is struggling to get into the industry Andy suggests "prop houses" (propriety trading firms), where you pay for access to a desk with a Bloomberg terminal, fund your own account and the prop house matches your investment. These help develop your experience, though you do need to fund your initial capital - it might be six months before you start making money (or longer).

Finally - and importantly - Andy suggested that perhaps only 10-20% of people who are interested in trading can actually make it a successful career.

Published 12 February 2018
Topics:
Industry Insights reviews

You might also like

Reflections on switching as a regulatory intervention

3 September 2018
In certain sectors - notably banking, energy and telecoms - customers are exhorted almost continuously to consider ‘switching’ supplier. Organisational structures have been developed to facilitate switching and the strategy of switching tends to be strongly supported by the regulator in those industries. For example, over 40 UK banks and building societies now participate in the ‘Current Account Switch Service’ run by the payment service, Bacs. In the energy sector, there is an ‘EnergySwitch guarantee’ and the regulator (Ofgem) provides advice on how to switch to a new supplier, as does Ofcom for the telecoms sector.

ICMA Centre MSc students to be granted ICMA IFID upon degree completion

29 August 2008
The ICMA Centre at Henley Business School, University of Reading is delighted to announce that students on seven of its Masters degrees will be granted the well regarded ICMA International Fixed Income and Derivatives (IFID) Certificate upon successful completion of their degree.

Infrastructure Funding, Finance and Institutional Investment - a new guide by Professor Brian Scott-Quinn

28 August 2015
Infrastructure is the new buzzword in finance these days even though infrastructure has been important at least since the days when the Romans built their roads across Britain and Europe. The difference today is that increasingly the government says it cannot finance such infrastructure - roads, railways, power generation, telecoms, airports etc. The telecoms industry is already completely privately owned in most countries as are an increasing number of airports across the world. But governments everywhere are now looking ever more to public private partnerships (PPPs) to provide the annual funding (the annual revenues required to service bank loan and bond interest payments and capital repayments and equity dividends) as well as the actual financing (the arranging of bank loans, bond issues and equity share issues) to provide the cash up-front.
Research news