In the news and on the internet, you might be noticing more and more stories about people ditching their day jobs to become quantitative traders. With the proliferation of trading as a career option, you might be wondering what the steps to becoming a quantitative trader are.
Well, fear not, because this article will describe the steps that you must undertake if you would like to take up a career in quantitative trading.
The Job Description
Firstly, you might be wondering what quantitative actually is. It basically means trading using algorithms and other mathematic processes that are used to detect lucrative trading opportunities and then capitalizing on them with computer software.
So, essentially a quant trader needs to have decent computer programming skills, a strong mathematics knowledge, and at least a basic knowledge of traditional trading as this job can become very technical.
Skills Needed To Become a Quant Trader
Typically, most quantitative traders have a university degree in a similar field such as accounting or economics. A master’s degree in one of these subjects will always help get your foot in the door.
If you have a master’s degree and you want to pursue a career in quantitative trading, it might be difficult to get straight into a role, that’s where a Certificate in Quantitative Finance (CQF) comes in handy. This is a course that is aimed at people trying for a career in quant trading. It teaches techniques used by traders in the real world and is highly recognized by employers internationally.
Another way to become a quant trader is to get a graduate job in something data or computer science-related and slowly gaining enough experience until you are considered to be an attractive hire. If this is the path for you, it is important to sharpen your mathematic knowledge. Quant trading is all numbers, so you need to be extremely confident when it comes to maths.
Additionally, experience with coding and programming is essential in the field of quant trading, so if you don’t have a master’s degree or experience in computer science, it is important that you brush up on these skills. There are multiple workshops and courses available for free online that can teach you basic, intermediate, and expert coding and programming skills.
If you can use one of these services and build up a strong knowledge of computer science and can show potential employers a portfolio of work, you’ll be more than capable of getting your foot onto the ladder of becoming a quant trader.
- The temperament of a traderNot every person can think and behave like a professional trader. Highly successful traders are constantly searching for new and innovative ideas in trading and are able to adjust to changes in market conditions and are able to thrive under pressure and can work long hours. Employers carefully evaluate candidates for these qualities. They may even conduct psychometric tests.
- Capabilities to take risks:The present-day trading world isn’t for the faint of heart. Due to leverage and margin trading that relies to computers, loss may exceed the amount of a trader’s capital. Quants who are interested in becoming quants need to know the importance of risk management and risk reduction methods. A successful quant could be able to make 10 trades and suffer losses in the first eight trades, but gain only on the two trades that make up the final two.
- Resilient to failure: A quant keeps seeking out new and innovative ideas for trading. Even if a concept appears unbreakable, the changing conditions of the market could make it unprofitable. Many hopeful quant traders fail due to the fact that they become stuck on the idea and continue to try to get it to work in spite of the adverse market conditions. They may be unable to admit failure and are therefore unable to give up on their idea. On the other hand successful quants employ a dynamic detachment strategy and swiftly switch to new models and concepts when they discover problems with their existing models and concepts.
- Innovative approach:The trading world is extremely dynamic and no strategy can earn profits for the long haul. With algorithms battling against algorithms and all trying to beat those that aren’t only the one that has superior and innovative strategies can be able to survive. Quants must keep seeking out new and creative trading strategies to take advantage of lucrative opportunities that can disappear quickly. It’s a never-ending process.
The Bottom Line
Quant trading requires advanced abilities in mathematics, finance as well as computer programming. The high pay and bonuses attract a lot of applicants, so finding your first job could be difficult. Beyond that, a long-term achievement requires constant improvement along with a comfortable attitude to risk and long hours of work.
To Summarise
Essentially, to become a quant trader, you need to have extensive knowledge and experience when it comes to computer programming, mathematics, and trading. You need to be able to show potential employers that you have what it takes to be a successful quant trader.
The huge wage slips, and potential bonuses are very attractive, and so large numbers of people are often applying to become quant traders, so you have to have the qualifications and experience to back it up,
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