What Do Quant Traders Really Do? |
Posted: September 3, 2019 |
How do an exorbitant salary and hefty bonuses sound like to you? You probably know that this is normal for the quantitative trading industry, and you don't want to miss such a career opportunity. But what does it take to become a quant trader, and what are you supposed to do?
In the most common sense, quantitative traders use mathematical models to identify trading opportunities so they can buy and sell securities.
Let's dive deep in a quant trader's job and skills requiredQuant traders mine and research the available price and quote data to identify profitable trading opportunities. They also develop strategies and take advantage of opportunities rapidly quick using computer programs (often self-developed).
In other words, a quant trader is a magician with a well-balanced mix of in-depth mathematics knowledge, computer skills, and practical trading exposure. To become one, you need to acquire a certain amount of technical and soft skills that you will find listed below.
Technical Skills A minimum of finance, mathematics, and computer programming background is required, but let's take a more detailed look at all technical skills and experience an aspiring quant should have. ? More numbers - Do terms like kurtosis, conditional probability, VaR, skewness sound familiar to you? If not, you are just not ready for the quant trading industry as you lack the required in-depth knowledge of math. ? Education and training - If you just graduated from college, brace yourself for more education. Think of getting a masters in financial engineering. ? Programming skills - As a quant trader, you will be expected to be well familiar with research analysis, data mining, automated trading systems, etc. Consider learning C++, Java, Python, and other programming languages. ? Trading concepts - Having a detailed knowledge of trading strategies is a plus but know that quants should be able to discover and design their strategy.
Soft SkillsIn quantum trading, it's not just about technical skills. A successful trader should be able to present their concepts to fund managers and higher-ups for approval. ? Risk-taking abilities - Let's start with the obvious. When it comes to trading, there is always a risk factor, and this also applies to quantum trading. A successful quant may take 20 trades, face 15 loses and profit only with the second and last four trades. ? Temperament - Not everyone thinks like traders, and a successful one needs to be innovative, always looking for new ideas and being able to adapt to changing market conditions. Dealing with stress and long working hours are also in the equation. ? Accepting failures - It is common for quant traders to get stuck in one idea that keeps failing, but they keep trying to make it work. A trader should be able to accept when they fail and let go of a concept that doesn't seem to work, no matter how hard they worked to establish this concept.
Quantum Trading is not for everyone but with proper preparation, dedication, and patience, you can take advantage of these skyrocketing bonuses and lucrative salaries the field has to offer.
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