if you are going to pick new traders

Discussion in 'Trading' started by 0008, Jun 30, 2003.

  1. 0008


    Assuming you are going to pick new traders. You can ask them questions, give them some tests but you cannot ask them to do mock trading or look at their track records. What would you look for?
  2. chisel


    If they insist on being right all the time, run, don't walk. I'd also stay away from braggarts.
  3. This is a good question, since the answers may help some potential traders get through an interview with a better chance of success.

    Of course, this is my personal take on the matter, and others may disagree. But I have been in the position to hire and I also had quite a bit of guidance myself from the owner of the company I represented and he had a lot of experience with traders on which to base his probabilities of success for potential hires.

    We looked for several characteristics. Intelligence was more important than formal education (though we virtually never hired anyone without a college degree).

    Personality: confident, but not "cocky". New traders must be willing to learn and have faith in the methods of the firm. After all, it is the firm's money at risk, and the employee must be able to recognize his or her responsibility to conform to the firm's policies regarding risk and approach.

    Financial ability to withstand little or no income for an adequate time in which to learn: Virtually ALL new traders lose at first. Too much pressure to provide food, shelter, clothing, and any other essentials during this period can be a very negative thing. Therefore, preferable candidates must understand that they cannot count on income from trading to provide their basic expenses for 6 months to a year on average. Sometimes longer. This is always made clear during an interview. It has to be taken seriously by the candidate. It is always taken seriously by the firm doing the hiring. Everyone likes to think they will be the exception and set the world on fire right out of the gate. It is possible, but only remotely. Definitely something not to be counted on under any circumstances.

    The failure rate will weed out those who do not catch on in an expected time frame. Attrition is a sad part of the industry. No one (or no one should) just hire everyone who applies, throw them against the wall, and see who sticks. That is generally unfair to the firm, and always unfair to the new hires.

    "Gambling" hobbies: While trading should not be equated to "gambling", and the term "gambling" is often defined differently by different people, those who enjoy trying to "handicap" horse races, or count cards at black-jack are more likely to enjoy, and therefore put in the effort to learn how to trade. They also usually have a fair understanding of money management. Competent (not compulsive) poker and gin players seem to have a greater success rate ultimately in trading. Lottery ticket buyers and slot machine players (for example) have a "buy and pray" mind set, and that kind of "gambling" is of no value in any endeavor. Dice players (and really they are not common if only for the fact that there is little availability of the game in the US except for Vegas and Atlantic City) are too rare to qualify. To me, playing dice is a form of entertainment, and not something people do with any real intent of winning (or losing...just being entertained). Chess and backgammon players (not likely to come up during an interview), would seem to be "planners", which should be an attribute, but no real statistics to my knowledge with these people. Can't hurt I suppose. In my recollection, no one ever brought these up in any interview I was ever involved in. However if either of these is a passion, I can't see any harm in mentioning them in an interview.

    Age: Legally, there should be no age discrimination when hiring. In reality, this is something that can be affected by the person conducting the interview, and not anything a candidate can control. But the fact remains that younger traders do have a better chance of getting hired. Older applicants must make clear that they are looking to do something new, and are willing to start with the same fresh and open attitudes that younger applicants will exhibit. Older applicants may have some advantages, but need to make them work in their favor. For example, they more often will have financial resources to see them through the learning period. Also, older applicants can, during an interview, make clear that they are very serious about their decision to make a go of a "new career" which could work for them. So depending on how one comes across, age can work for or against you whether younger or older. I know often "older" applicants will believe that some prior experience (as traders, investors, whatever) will enhance their chances. This is a strategy that will more often than not backfire in an interview. You must be clear that you are willing to learn the firm's "way" and put aside whatever you have learned in the past. Unless of course, you are coming with an established and verifiable trading track record, in which case you already "have the job" and none of the above is relevant.

    Presence: No one wants a loudmouth person trading next to them. Stand up comics, and people that crave attention are a distraction in a trading environment. Just as true, no one wants a dull person with no "spark" either. The ability to stay friendly but not overbearing; humble, but not withdrawn is ideal. Of course often a person behaves a lot differently in an interview than they will when on the job. While large companies may administer personality and aptitude tests, trading firms are generally not that sophisticated in their hiring practices. There are no proven "formulas for success" with traders. Successful traders come in all forms. So remember, you are not trying to get hired by a company that has statistics and profiles for success based on thousands of applicants, an decades of analysis. Make a good impression. Be enthusiastic, serious, and definitely do not come across as arrogant! (would anyone hire someone with MrMarket's act?...absolutely not!).

    Just be friendly and cordial and smile when it comes naturally. Be yourself, and be respectful toward whoever is interviewing you.

    Most interviews will intentionally stray from the dry facts. Anyone can read a resume. The interview serves to give a sense of who you are, not what you have done. Being "likeable" goes a long way. Being humble yet self confident goes a very long way. Trying too hard to be "personable" is a mistake. Don't try for laughs. If they come, fine, but don't push for them.

    Most importantly, make it clear you are very excited about the opportunity, and will give 100% effort if given the chance. Always follow up with a phone call. Do not be a pest and call constantly pushing for an answer (if the decision is not yet made), but DO give yourself and edge by staying on top of things and demonstrating enthusiasm. Don't let them forget you!

    Good luck, and I hope this helps someone.

  4. CalTrader

    CalTrader Guest

    Hard work, dedication, and most important: they need to be trainable. I would also add that they need to be a proper match: you dont want to invest a lot of time and effort in training somebody who will just take your info and leave.

    We look for people that are very cool and disciplined and that understand money management and risk. Successful employees have come from a variety of disciplines and backgrounds. However, there are some personalities that just dont seem to work in trading: over time you tend to recognize those that probably wont cut it and steer clear.