Trading Jobs – How to Get One and How Much will I Make?

How to get into trading firms?

Let me first lay down the bad news, it is incredibly difficult to get into top Type A trading firms without the above qualifications. It is almost impossible if you want to get into a high-frequency role without those qualifications (unless your dad owns the firm!)

For Type B firms, it is still difficult but it is no where as difficult as Type A firms.

Now that the bad news is over, here is the semi-good news.

Other than directly applying to trading firms, here are ways to increase the odds of your success:

• Find a mentor/be an apprentice
• Work backwards from the job descriptions
• Contact those not in the HR department
• Get hired at a lower tier firm (first)
• Get your foot through the door in a related role
• Get good at trading

Find a mentor/be an apprentice

Get an experience trader to teach and guide you.

Cold emailing some trader with the message “please mentor me I’ll work really hard!” will usually not get you any results.

When someone hears mentorship request, they equate it to “commitment, work and responsbility to a stranger while not getting paid”.

That’s not a great way to approach a mentor. Here are 3 better ways:

1. Ask concise and specific questions
2. Offer something they need
3. Have a high cost of signalling

1) Ask concise and specific questions

Most people are willing to answer questions via emails. But you need to make it easy for them.

Ask them a concise and specific question. Tell them what you tried.

Don’t ask for facts that can be googled.

Don’t ask for commitment such as a coffee meeting, being an academic thesis supervisor, mentorship, or to be partners to form a new hedge fund because you have a killer proven strategy and “all you need” is someone to code it and run it for you.

A good question could be:

“Hi So-and-so,

I read your blog/background and I feel that you’re really qualified in XXX arena.

I’m trying to build a trading strategy by scraping data off YYY sites. My aim to predict stock earnings by running correlation analysis of the scraped data and price.

I have the following data (A, B and C). However, I’m not sure how to decide which of those data is relevant for trading ZZZ stock.

Personally, it seems that A and C would be relevant since they are correlated to revenue. But I might be overfitting my strategy to my data.

Could you point me in the right direction or advise me if I’m on the right track?

Thanks!”

2) Offer something they need

Sometimes, manual traders want to build an algorithmic trading strategies and don’t mind taking on fresh guys with some quantitative skills.

Other times, firms need “number crunchers” and will take on someone who exhibit decent programming skills.

Find out what your audience needs and see if you can provide those.

I was hired as a quantitative intern at a proprietary trading firm. I helped my boss with quantitative analysis and he taught me trading. Win-win.

(I definitely got the better end of the deal.)

3) Have a high cost of signalling

It is easy to send an email to apply for a job or ask for help from a mentor. Many companies receive emails from job applicants.

However, if you show that you’ve did a lot to to deserve an opportunity. You will stand out.

If you want be an apprentice to a trader, show that you research and traded his asset class. Show that you understand how it works. Show that you learnt AI because you think you can enhanced his returns by implementing some machine learning technique. The list goes on.

The costlier your efforts, the higher chance you have to stand out.

Work backwards from the job descriptions

Look at the job descriptions of the jobs you are interested in, then work backward and learn the required skill sets.

Find ways to show that you are adept at those skills.

For instance, if they are looking for a data scientist or someone good at AI, go join (and hopefully win) Kaggle competitions or build a portfolio of project that exhibit those skills. Don’t just show what you’ve learnt on your CV, show what you can do!

Contact those not in the HR department

If you applied via the regular route and the HR department rejects your application, try talking directly to the managers in the department you are keen in.

Find them on Linkedin and message them there.

Get hired in a lower tier firm (first)

Ideally, we want to get into a top trading firm straight away.

We don’t want to enter a lower tier firm as, to a large extent, we are judged by our last held job and salary.

However, if you’ve applied to top trading firms multiple times to no avail, do consider starting in a lower tier firm.

Once you’re in, work hard and smart and excel. Then use your accomplishment and experience to apply to a top firm.

Doing this is better than banging your head against the wall for years while being jobless.

Get your foot through the door in a related role

Just get your foot through the door in the firm you are interested in, even if the role is not what you want.

From there, work you way into the trading/investing department.

This is probably the best choice as you get paid in the process.

Get good at trading

Being good at trading means to have a good trading record for a few years.

A good performance entails consistent returns with low drawdowns.

Making 25% per year annualised for 3 years, with a 5% maximum drawdown, and being profitable 90% of the months (Up 33 months out of the last 36) is an example of a fantastic record.

If you’re that good, I suggest you don’t join a Type A firm.

Join a Type B firm. A Type B firm will allow you to trade solo while keeping your ideas to yourself.

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