<p>Is it true that in 10 -15 years, the big dogs in trading will all be quants or people with a very strong math background? What is the situation right now? What are the background of the top hedge fund traders and traders currently? Did they have a background in economics (fundamental) or math (technical)?</p>
<p>anyone know this?</p>
<p>Markets are shifting to a more quantitative style. Having a good mathematics backgrounds helps. As well as a working programming background. Some of the most profitable traders/HF managers nowadays have mathematical and quantitative background. However, you still have discretionary traders capable on making a lot of money (but they have an intuitive understanding of probabilities, game theory etc).</p>
<p>That would be good. A lot of it depends on the interview. Your schooling will help you make the first cut but after that it all comes down to the interview. At the top trading/HF firms the interviews are quantitative (probabilities, mental math, at quant places..programming questions, logic etc).</p>
<p>"Quant" is a general terms. Many quants do not trade, while some quants do trade. Some quants work in derivatives pricing while others may work on data mining etc to find potential non random behavior. Many work in risk management and assisting traders conduct business as well. There isn't one encapsulating description of what a "quant" is.</p>
<p>Traders are gamblers. Do you like gambling? When you lose, does it bother you? Do you have problems taking losses? Do you have a problem admitting you were wrong?</p>
<p>Do you need a steady salary, or are you willing to have your income fluctuate?</p>
<p>Do you love the markets? Do you read about them for fun?</p>
<p>I also suggest reading the Market Wizards series (all three). The second and third has a few traders focused in quantitative styles while the first one has several great discretionary traders. Everything dstark said is true (although once the odds are on your side its not gambling ;)...it becomes a + expectancy game)</p>
<p>This is a nice article on a well known HF/trader focused on quantitative styles: <a href="http://www.thomasbass.com/work13.htm%5B/url%5D">http://www.thomasbass.com/work13.htm</a></p>
<p>"(although once the odds are on your side its not gambling ...it becomes a + expectancy game)"</p>
<p>You can still lose and lose big.</p>
<p>The problem with computer systems is it is easy to get into a trade, sometimes, when you want to get out, there is nobody on the other side to take you out.</p>
<p>Naturally streaks on loses will exist. This can be seen on various monte carle simulations. But my point was that gamblers bet when there is a -edge (casinos: roulette) while profitable traders bet when there is a +edge.</p>
<p>Liquidity risks (especially when its a crowded strategy) is a problem. That made that LTCM debacle into a disaster. However, a fund which trades in moderate size over a large universe can lessen this.</p>
<p>Are you a trader dstark? I remember an ex options trader frequented CC but I forget who it was.</p>
<p>Yes. Can't you tell? :)</p>
<p>Making sure thats all :).</p>
<p>so a computer programming background would also help?</p>
<p>Yes. [10 character]</p>
<p>dstark: what was your background to get into trading, it's a profession I've been heavily considering lately. Right now I'm going to be an Industrial systems engineering major, thinking about switching to finance if I don't like it...any advice for either of those?</p>
<p>also with trading, how hard is it to break into, and do you need to go to a top school like IB's do? I'll be attending University of Florida.</p>
<p>You should major in what you like best.</p>
<p>Which school you went to has never correlated with how good a trader a person is so I hope most places don't care.</p>
<p>If you want to work on a trading floor, I would try to get any job on a trading floor I could just to get into the business.</p>
<p>If you want to work for a hedge fund, I'll leave that up to Mahras since I am out of the loop. </p>
<p>Very few traders are successful. We read about the successful ones, but most traders fail.</p>
<p>The Market Wizard books are great.</p>
<p>There is a lot of luck to being a successful trader, more than most successful traders are willing to admit. :)</p>
<p>It's a very competitive working environment. You have to love to compete.</p>