Hello, first post here. I am an aspiring trader, would like to work as a currency or commodity trader for a bank or other firms. Current Plan: Finished MBA from U Chicago in June 2007. Working a corporate job now, bored with it. Planning to take CMT exams (certified market technician), Series 3 for commodities and futures, and take courses at Chicago related to derivative trading strategies and risk management. I have been watching the markets for about 6-9 months, and trade on a demo account right now. But alternative paths could include doing another master's degree in financial engineering or preparing for the CFA exam instead.... Just feel uncertain as to where my current plan takes me.... a CMT/Series 3 and random courses at Chicago after I've already graduated..... Any insight appreciated....
Explain please why you would work for a broker. For money? You will never get wealthy working for someone else. For stability? Brokers fire traders for no reason. For prestige? How much prestige is there in working for someone because you couldn't make it as an independent? Not trying to be hard, just realistic. Have you developed your own system? Can you at least beat the S&P? If your plan is to steal some system from your broker, a client, or glean something from their systems that will enable you to beat the markets, I respectfully wag my head in disagreement. School taught you about investing, but only time with your own money on the 'buy' and 'sell' buttons will teach you how to trade. Is cash a problem and you don't have anything to trade? If so, work your cojones off and save for it, then you will respect your trades more. I simply don't understand why someone would work 8-5 when they could work 6-2 or 6-8 and be done with it... in their boxers! May I suggest you conduct informational interviews with a dozen traders who work for brokers...
I got my series 3 and worked with a broker for a few years and learned a lot about trading. Take the ET pessimism with a grain of salt...
I bailed on further formal education when I decided to just make money and not manage other people's money and BS. It worked. I know more series 3 people out of work or broke than homeless bums downtown.
I would like to work as a trader so I can build capital and also gain experience in trading. The eventual goal is to work on my own as a trader. As I mentioned, I am still trading on a demo. I plan to start real money in Jan of next year assuming I continue success on my demo account. It is possible I could start off making money and never need to work for someone else....but not counting on that. In the short-term I would like to work for someone else to build experience, credibility, and capital.
Having U Chicago on your resume will definitely earn you a look but just being smart and graduating from an Ivy League school doesn't mean you'll succeed in trading. If you have the time and effort give IIT a look. They have a decent certificate program that will give you as close to real life experience as you'll get other than actual trading. Based on my experience -- and I have a lot of it -- analyzing the market from a statiscal viewpoint is the superior way. I imagine U Chicago is telling you statistical analysis doesn't work because the markets are non-mean reverting, and have non-stationary and unit-root problems. Watch what happens to the market when the market goes +/- 3 sigma on non-news driven events and 3.5 sigma on news driven events. All bets are off on the Fed. Throw a little money management in there and you have the perfect recipe for success. Also based on my experience, and a point most traders will argue with, you can't time the market and trading with close stops will just gaurantee your failure. The market is a lot more random than people thing but not 100% random. Just random enough to make statistical analysis the superior way. Good luck with school and trading.
Oh, and all the other stuff you mentioned, the CFA, CMT, series 3, etc......won't do a thing for you on your pursuits to become a trader but they certainly will demonstrate how driven you are. I planned on getting all three of those at one point but by the time I was ready to take Level I of the CFA I was already trading successfully and decided against it. Definitely get the Series 3 and/or 7 if you can. Licenses come in handy down the road.
You need trading experience, until then you'll be stuck basically fetching coffee. I am trying things a little different, and have basically placed an on-line resume summarizing my trading (and today is the 1 year anniversary). www.beatingthesp500.com Good luck.
Interesting viewpoint on mean reversion. I inherently incorporate some of that into my trading now. So Series 3 and CMT won't improve my trading? Hmm..ok. Guess I would be doing it to demonstrate drive and a certain level of knowledge. On IIT, I have looked into their programs and impressed by they offer. Am strongly considering the certificate program in Trading Strategies. Am also considering a graduate certificate program at Golden Gate University in technical analysis, with a specific focus on the Wyckoff method/Volume spread analysis. Thanks for the comments.