I agree with you on this. Having decent personal trading performance is a good signal that you are interested in the market, but it in itself doesn't help. Certainly, no one in a respectable buyside or sell side shop will hire a trader/analyst/pm because he made a living trading his own account. In fact, I'd argue that it's a point against - the person is probably too confident in how he wants to do things and not interested in the job that actually needs to get done.
Moreover, prop desks and funds are probably not using the same strategy you are trading, so that makes it even less applicable.
It's possible to go from having a stellar personal record to being seeded by some niche fund; but the hurdles there are obviously huge. Aside from all the obvious issues, people usually miss the considerations around capacity. If your strategy can't handle more than a few million, what's the point.
Quote from ezbentley:
Another thing I have heard is that just build a good track record on your own retail account and use that performance to get in. While there are certainly people who have done it, I think the odds are so against "building a good track record" to begin with.
If you trade swaps, for example, and the equity market drops 50%, swaps liquidity will dry up and all of a sudden you experience a shift in your market that may very well be the end of your strategy.
I guess if you think that you need to be married to only one asset class, you can get screwed.
I should have used a slightly different term, I apologize.
sjfan's point is well taken. Being an outsider myself, even though I work hard on self-study, I do consider going back to school or take some examination(CFA, FRM..) to have some formal credential to get into the business. This seems to be the more logical way to switch career. As you said, doctor and lawyers go to school to perfect their profession. Finance should be the same.
I myself am going to get a low cost MBA, because I think that will serve two purposes. First, it will help me get a job in trading. Second, even if I don't have any luck with that, I'll have a systematized way of learning what I need to know and that will always help with trading. Plus its a great way to a backup career if you totally bomb as a trader
The large institutions have separate job postings for traders and PMs. How exactly are their roles different? Don't PMs have to make trading decisions? And traders must manage the trades(portfolio) as well? What is the typical career path that leads to PM in money management or hedge funds?
I am looking at this from an individual trader point of view, since any individual trading his/her own account must also manage the portfolio. So how is this different from an institutional setting?
Thanks for any clarification.
One Cons other people(Portfolio Manager), the other(trader) is eventually a bankrupt
Agreed. Diversification of skills, like revenues, like assets, is key. But it's easier said than done. Diversification is also very very costly. A world class options dealer, for example, probably will have a very tough time retooling into a macro manager; We all take on systematic risk. By virtual of being alive, we are massively long beta.
Quote from Georgii:
I guess if you think that you need to be married to only one asset class, you can get screwed.
I should have used a slightly different term, I apologize.
