Most prop traders in London I've met with with a half decent degree did investment bank interviews first, it's where everyone who didn't get into trading at a bank turns as second option. I've seen a few pHd in maths and finance tackle prop trading unsuccessfully. They kept insisting on where the market should be due to their calculations rather than being adaptive. Qualifications make no difference in prop and you certainly don't need maths to trade futures.
i have spent nearly 30 years in the futures and fixed income trading world , there are dozens of trader definitions and many types of backers with capital and you need to understand the differences to make a choice that suits for you and your potential career.Beware the jargon for me i spent 10 years at a uk merchant bank in treasury 10 years at a private trading firm running capital as a cta and then the last 10 years trading my own capital as an independent local financially the last 10 are the worst for sure by not least the nature of i risk my own money day in day out,and however good you are you will lose at times, so most of my friends feel i was nuts to risk my own money, but as a non financial comparison life style choice (i live and work when and where i want to) it was the best choice i ever made,and suits me as a human being, but everyone will put a very different value to that decision.For most feeding greed with remuneration is the only reason to be in this game and therefore always having a salary ,having the option of losing someone elses money and only your job if it goes wrong whatever the nature of your "trading" (prop or franchise) is "the only decision to make " Most arcades or prop shops will give you access to their capital but they simply play a numbers and volume game with transaction volume being the driving force.They churn the numbers, and traders are just numbers so you will get churned too. They are highly leveraged and therefore the secret of the good ones is their risk management,negative correlation, and like any trade running good ones and cutting bad ones.No room for losers.Time will not be on your side at an arcade. For my style of trading (relative stir curve) the macro knowledge i gained at the firms has proved invaluable to my progress to trade my own money but as a local, i have met many many fantastic traders,who as young inexperienced barrow boys do not even know the way to calculate a basis or a cash equivalent, cant spell economics and who have no idea who bernanke or king are and everything fundamental is "greeks" but they understand human physche and emotion, can feel short term price pressure and are brilliant scalp traders,pissing all over most bank prop traders i have ever met or worked with ,with a discipline,risk management,and work ethic many employed people never show. equally there are bank prop traders who take their fundamental knowledge and position it to great effect with spectacular financial success to both them and their backer very few bank traders these days are genuine prop and if Obama et al have their way then ever fewer in the recognised financial centres will exist ,almost all have a franchise and customer flow that they then add value to with a trading and knowledge based quant skill and most delude themselves that they can make money from a total blank sheet without a firms franchise behind them.The seat and the desk is the money,they are only the cream.Thats why payouts are sub 10 percent and at management discretion in most cases.But as many replies to your post have indicated a salary and 10 percent of a big pot is much better than no salary and 50 percent of nothing. No one with any longevity in mind will pay inexperienced you 50 percent plus of p/l with 100 percent of the downside risk to their money.Those that claim they do are getting money from you in other ways before they payout. For me knowledge and experience has kept me in the game during trading my own money particularly over last 2 years with all the turmoil and that was gained at banks and firms, so i would go to a firm learn as much from all around you and then take that knowledge develop a trading style and skill that suits you and your mind and then choose from the myriad of different backers (including yourself) that are available.Markets will still be around in 5 or even 10 years and arcades and backers will still exist No hurry, knowledge is power
Very interesting to see the phenomenon of "feeling price pressure" assessed with legitimacy. I excelled at psychology and have been wrong most going against my intuition on prices in trying to follow "rules" (stops) now I accept rules that give me qualitative wiggle room. Recently going short on oil was formulated on that basis, I noted deteriorating economic conditions that I sensed had not been priced in, they shortly were after. I read lots of financial news and watch prices closely, I find I can gauge market sentiment well. The thing is, most everything I read runs counter this sort of approach. I am working on quant skills now, math and econ. But a blended approach that takes stock of this ability to sense price pressure seems best. How does one continue to develop this, besides continuing journalling on markets? Is there anything to read that's recommended? I definitely feel it's a valid, yes misunderstood skill.
I don't think everyone can apply to bank trading positions. Banks are very selective and always recruit from the top schools. Prop firm have their place in the markets. I have seen many good prop traders move to bank/hedge fund trading positions some of them just by using the trading knowledge they gained, others did their MBAs, CFAs, Msc while trading. The industry has also changed a lot. There are many backers for program traders. You can develop your own strategy easily now. If you can prove your strategy is profitable the sky is the limit.