I heard that as a college student who starts off with a prop trading firm, it would be more difficult for that person to get a job in another financial position such as asset management, financial analysis, IB, if that said person failed as a trader and that straight out of college students are preffered, but it is said that one could always go to a prop firm after experience in a.m, ib, etc. Any truth to this?
well, if he does it right, he won't need it. then again, if you're a 'go for broke' kind of person, the sort who really sets off to do his own thing (like make your fortune trading), you'll never be mainstream. They just don't get it. It's one of the risks....
Hmm... I think what you are saying is probably partly true. I'm not sure what's life AFTER prop trading as another thread pointed out. is there one? haha. Let me say this as a reflection. I went the a.m/ib/institutional route after college and I learned a great deal about how institutions trade/invest in large amounts(mil to bil). BUT BUT had I instead went to the prop trading route right after school and it was during the craziest bull markets of the last few years and learned my chops as a good trader, I'll probably end up with a few millions now at least I would say. I mean just going long QCOM for '99 would have gotten you 2000%. i.e. a mere 100K investment in QCOM near jan '99 would net you about $2M by the end of the year! And there were tons of those double,triple,quadruple opportunities as you are quite aware of. But instead, I went the "safer" a.m./ib route, because 1) I didn't know about prop trading/"day trading" or whatever. 2) because it was the thing to do for top school grads 3) prop shops didn't come recruiting on campus of top schools but major wall st/ib/a.m firms did. But now that markets have become tougher, then maybe as a new college grad for you(assuming '02?) then maybe the dreams of instant millions isn't there anymore or at least not for a while. But as chasinfla and many others said, it's an entrepenuerial job. I actually like my prop job BETTER than my am/ib jobs I've had in the past. I know it sounds CRAZY and my friends/family thinks I'm crazy to go this route, but it's something I feel strongly inside. I think once you get a taste of it it's hard to give up. The freedom. The autonomy. But it's all at a price of not a steady salary,etc. But in the end, if you think you can hack it, then go for prop b/c the rewards are unlimited and only capped by your trading ability. hopes that piece of advice/perspective is useful coming from a person who has done both the institutional ib/am world and the prop shop trading world. I hope I'll prove myself right one day and not disappointed for chosing the tougher path w/ less security... good luck to me and all you on ET.
Thanks for vote of confidence. I sure hope I'll make it. Cuz I just know I will.. It's burning inside of me... At what level of trading would you think be "satisfied" with? $80K/y ? $100K/yr? $200K/yr? $500K/yr? $1m/yr? $1M++? How do you measure your level of satisfaction with your choice of prop trading career?
good question. There have been days when i've made money and yet walked away without feeling that I'd done a day's work. That is not a good feeling, no matter how much money you make. Once there was a trade where I lost money but was completely satisfied because I had done what was right (had a good reason to get in, stuck to my plan, honored my stop -- just about). I like what Paul Tudor Jones said: Hopefully I'll make the market I want to make and retire a champion. -- paraphrase. That's it for me. My goal each day (as a daytrader) is to trade right. To know that I honored my convictions (with discipline, babak). I feel like a failure when I get faked out, which happens more than I like it to. I want to see the opportunity and press it. When I do that, I feel like I've done my job. To trade this way in the maximum size that is possible is my goal...in whatever market can bear it. My nut is about 25k a year. Anything more than that is gravy. There are lots of things I can do with the excess -- lots and lots of people who are worse off and need help. I'm looking forward to doing more to help some of them. It's burning in me, too. What else would keep someone in these markets day in and day out? I just know that these markets are teaching markets. Survive and/or prosper in these markets, and you'll be more than prepared for the next bull market (if we live that long). And that burning is, I think, exactly what's needed to do it. I don't think I did the subject any justice here.
chase, OK. That's a good attitude to have! Way to go. But I think for most professional people(including myself) as well as new college grads or newbies(especially them), the question is not so much as $ but more of "opportunity cost". I mean I've done both worlds so it's OK in some ways. For someone totally, new the opportunity cost is rather high. Because if they didn't go get a "normal" job right out of school and failed miserably as most people do at daytrading(95%) the first year, then what do they have to fall back on? I mean they could as a new grad get at least some pretty decent salary depending on jobs/location.degrees,etc. and some experiences too the first year out. And they can learn to trade on the side while in a job environment(mayeb swing or investing). And still learn other useful skillsets. I don't think life is so black and white. That you gotta do trading or nothing else is worth pursuing. I mean trading is hella fun and potentially lucrative. But someone so young should explore life and do other things that might interest them too.. In fact, sometimes, I think my opportunity cost is really high as well. However, I'm betting the rewards will be higher than the opportunity cost. But at some point, one has to cut your losses. I'm not there yet nor will I be.
Many people switch to daytrading because of the allure of having complete autonomy and the possibility of making alot of money. Some also use daytrading to get out of dead end jobs and are spurred on by success stories of people who made millions (of course this was years ago). A lot of people stick to daytrading even after limited success because of the addictive nature of the trade and the exhilarating rush of having a great day. This fuels them through the down days because they believe a jackpot is right around the corner. This is a very self-destructive mentality. You have to approach daytrading as a serious job. I believe that it is the most difficult job in the world because you're constantly battling your inner demons (fear and greed) and self-discipline. It is very easy to blow up if you fail to respect the market and believe you are above it. Don't let the easy hours and slack dress code fool you. It's much easier to be a CEO of a large company than to be a successful (consistent six figure annual income) daytrader! The opportunity cost of daytrading is very high if you are well-educated and came from a high paying field. Think long and hard and get a realistic view of daytrading from real traders (not snake oil sheisters) before taking the plunge. Daytrading is not for everyone. You have to love the markets and the intellectual challenge, not the thrill of having a big day. If you're looking for thrills, go to Vegas or AC for the weekend.
everything does indeed have a cost. i suppose if you think trading is really for you, you'll ante up. If not, you won't. I believe that, ironically, the best markets are made by people who are in it for more than money. 86% of the ones that weren't have probably found other things to do by now...
I think you are right on with what you say except for the above. I don't know if you have ever been a CEO, but pls be assured it is very very tough. Trading is hard but so are most things if you want to be succesful. Cheers