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Is day trading a dead end?

Jedison

Jedison

Joined
10/19/13
Messages
145
Points
38
I interned this summer at a day trading firm and was recently offered a position as a full time trader. Among the non quant firms I'd say it's one of the top 5 places to prop trade. I've heard a lot of criticisms of the firm and prop trading in general as a dead end as there is basically no salary/career progression. While it's hard for me to speak intelligently on such matters as I have yet to enter the work force I can testify to the fact that the top guys here are making big, big money and most are still in their twenties. I'm joining Columbia MFE in the fall so my exit opps are pretty open at this point. Would I be a fool to take the job? Would I be a fool to pass on it?
 
As far as career moves go, day trading tends to be the "high risk, high reward" type of thing... ;) at the end of the day it depends on what you want to do, how important it is to you to make a ton of money fast, and how much of your future you're willing to risk for it... If you want to do it, though, and it's not explicitly a quant trading position, I'm inclined to think you could probably save yourself the $70k and skip the MFE
 
Jedison said:
I interned this summer at a day trading firm and was recently offered a position as a full time trader. Among the non quant firms I'd say it's one of the top 5 places to prop trade. I've heard a lot of criticisms of the firm and prop trading in general as a dead end as there is basically no salary/career progression. While it's hard for me to speak intelligently on such matters as I have yet to enter the work force I can testify to the fact that the top guys here are making big, big money and most are still in their twenties. I'm joining Columbia MFE in the fall so my exit opps are pretty open at this point. Would I be a fool to take the job? Would I be a fool to pass on it?
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Follow Warren Buffet's footsteps! Go for it, man! Goodluck! :)
 
Do you get base (fixed) monthly salary in your trading firm or is it just variable pay, based on how much money you make ?
 
if you are 101% certain that if you can be as good as the best traders there, then go for it. but it could be a dead end. either an end to early retirement or to suboptimal resume with probably low chance getting into bulge brackt IB's ever again.
 
I wouldn't base your decision on how well the top guys are doing. I would base your decision on how well your performed during your internship, and more important your passion for trading. If you loved everyday on the job, then I would take the full time offer. Very few get the opportunity to actually become day traders at a prop firm. At the very least the industry kicks you out and you can always reapply to another MFE school. I would say it is a lot harder to get back into trading then the other way around.
 
If you are good at trading and the job pays a decent cut from your P&L, take the job. There is no point going into MFE if you can become a trader in one of the prop firms.

You can take the job and re-apply as a part time student. I know Columbia University provide the part time option in their MFE program. I am pretty sure you are 100% getting in when you re-apply MFE. But not the other way around.
 
Thanks for all the replies. Definitely appreciate the input. The payout is around 30k base+25% of p&l until you hit 100k in p&l. At the point the bonus percentage moves up to 60%. Most good traders accomplish this in their first year. At the point I've decided to proceed with my MFE as I won't even have the offer letter for a few weeks. I really loved the job and I think I would be very good if I were to work there. My biggest deterrent at this point is my love for math/programming. If I can make money using these skills each day I think I may be happier even if my end salary is a fair bit lower. That being said I am still carefully considering the offer. I'll update this thread in the coming months when I make a final decision (if anyone here cares!). Thanks again
 
Get the degree and use your experience day trading to implement software that does the same kind of things that you were doing by hand. There's no reason that I know of that day traders can't be replaced by software.
 
Ian Kaplan said:
Get the degree and use your experience day trading to implement software that does the same kind of things that you were doing by hand. There's no reason that I know of that day traders can't be replaced by software.
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Most of the top traders were implementing event driven strategies. That is they would carefully follow stories waiting for a major headline to hit that would move the market. Programs aren't very good at that sort of thing
 
Obviously non-organic software is not going to replace the human brain in the near future. But a lot can be done with text mining and people have implemented these strategies.

Part of this is a quality of life issue. Do you want to sit at a computer mechanically trading. Personally, I'd rather design, write and test software.
 
I completely agree. While there is something thrilling about making money executing trades manually I would rather be writing algos
 
Jedison said:
Most of the top traders were implementing event driven strategies. That is they would carefully follow stories waiting for a major headline to hit that would move the market. Programs aren't very good at that sort of thing
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for even driven strategies, how do guys defined entry/exit criteria ? do you guys read tape?
 
For stories they have been following for a long time they may have price targets/max loss in mind when a catalyst hits. I think a large part of it was still based on gut instincts and watching patterns in the stock movements.
 
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