>Would you say that an individual with a PhD or extensive experience would be better suited or have a better chance at algo trading?
Yes, if the PhD was in the right area.
>Or would a MFE be enough assuming said individual was creative?
In no case is an MFE adequate preparation.
An MFE on top of the right undergrad degree might do it, but MFEs simply aren't the right qualification. At the risk of over-simplifying, an MFE has net negative value if you are focused on algorithmic. Some hiring managers explicitly say they don't want MFEs, others feel that the content is largely irrelevant and that if you were smart enough to do this stuff, you could pick up Wilmott and teach yourself.
Also, no finance course anywhere teaches you
C++ enough to get through a serious interview for these roles, and I include my own work in that set.
The typical MFE has inadequate coverage of game theory, and many don't cover market microstructure at all. Some MFEs look blankly at me if I talk about Kelly, which shows at the very least that they aren't properly prepared, and often that they aren't up for it.
But I'd like to clarify what exactly I'm talking about here...
I mean the cream jobs, where compensation may be explicitly unbounded, where you get to devise algos and play with real money.
Although algo teams tend to be smaller than in some other types of trading, there is any amount of work in managing risk, building components, data mining, testing & debugging, backtesting, and dealing with the golf players in central IT.
They're not bad jobs (usually), and there is a realistic prospect of moving to the front line. These are attainable by MFE grads.
One other thing I'd like to make clear is that doing a PhD for purely career reasons is all the way dumb. You're typically buying >4 years of misery and penury, unless you have a genuine interest in the topic you are pursuing.
I've toyed with starting a research group to do this, and even got the head of one university department to tentatively agree to host it. But it will probably remain a pipe dream because I have found that what people want is for me to explain to them how to be algotraders. Sure I know rather more about this than any other headhunter, but the key term is that I'm a HH who's done more different jobs than is good for him, not an algotrading veteran. The group would start with
main()
{
}
A pile of data to screw with, random people to pick the brains of, but no lectures or spoonfeeding at all.
I have been disappointed but not surprised to find at this point, interest is lost quickly.
Amadeus was a good movie but I read it wasn't very historically accurate, which given Hollywood isn't surprising.