Can You Trade for Yourself while being a Professional Trader
Vložit
- čas přidán 3. 07. 2024
- There is a lot of nonsense going around about quantitative finance. Most of these are anecdotal evidence meaning they are either an extreme outlier or something of the past. To top it off, people with no experience continue to push these ideas because they heard from someone they trust such as a professor in finance or they inflate the numbers to make them self feel better about being in finance or quant finance (though they aren't as closely related as people think).
One of the fairly tales I constantly hear is how you can get paid a good salary to work for a company and then trade for yourself. People assume there is some secret skill that you'll learn as a professional trader that you can then apply to your personal trading. What most people don't realize is that the advantage many of these large firms have is the number of employees who are specialists in different areas (quant strategy/model development, validation, implementation, and trading). These firms also have millions of dollars worth of high quality data and servers.
Now to top off all the resources differences, most reputable trading firms have restrictions on employees trading. Why would a firm let you front run them (i.e beat them to a trade)? The company invests a lot of money into building a trading and investing business. If you use the information you gain from their resources, you are stealing from the company that employs you. It's no different than stealing a laptop or printer. Every company will have different rules and if they are broken the company can take LEGAL ACTION against you. DON'T STEAL!
Quant t-shirts, mugs, and hoodies:
teespring.com/stores/fancy-quant
Connect with me:
/ dimitri-bianco
/ dimitribianco
☕ Show Your Support and Buy Me a Coffee ☕
ko-fi.com/fancyquant
Wow, Did not know this. This just took out the Glamour from my understanding of the Finance Industry. The whole time I thought this is the greatest job in the world, not only are you getting paid to work and learn in the FinMarket Space, but everything you learn at the company can be applied to multiply your own money/salary and play around with it. I didn't know "this" Is Insider Trading. Now I'm Depressed
Yes the dream of two incomes from one job is a fairy tale unfortunately.
@@DimitriBianco Thanks Dimitri
Spot on advice! Speaking as a systematic trader at a large firm.
why would you even want to try and utilize a corporation's complex system of strategies as an individual anyway when most of these firms offer a private investment fund for employees where you essentially reap the benefits from the performance of the entire company
Yes I've heard most of these buy side companies mandate you as an employee to put up your salary in their fund, but wasn't sure of it.
Nice vid Dimitri
Except for urgent personal situations, opposite trades(i.e. buy/sell or sell/buy) can be banned for 60 days instead of 30 days. I guess it depends on the department/company.
I always wonder what active actions you need to perform all day while trading, how is algorithm trading not 90%+ automated only taking like 3-5 active human actions a day?
Serious question because I’m a just someone from another field wondering.
Your channel is great! Everything I enjoy doing. When are you going to discuss Bitcoin? Its CS, Maths, Stats in the financial world...
So you can trade asset classes outside of your jurisdiction and without using proprietary information?
Yes, but there are a ton of rules - in my case you MUST apply and get approved for all trades manually. This makes it virtually impossible to do anything super quicky, also you cannot sell anything you have held for less than 30 days. I believe these are pretty typical restrictions. So short answer no you cannot trade.
What if I develop strategies that are in the same asset class but are completely different from what I do at work?
It depends on the firm and their rules. To be honest, you most likely won't have the time to do your own thing as quant finance can be demanding on your time.
do you guys use genetic algorithms in trading systems? what sorts of inputs do your models have? thanks
I don't work on the trading side however every model we use in banking is custom built for each application (this is the same for trading though). Different areas of finance (market, credit, ops, and PPNR) have general model types that are common however every firm has their own custom models. If a firm pays a consultant for a model it can cost $1mm+ depending on the complexity.
@@DimitriBianco ok, thanks for the quick reply
Hey dimitri, I had a question on what you thought of retail algorithmic trading? I’m a student who’s studying mathematical finance in school so naturally I came across various “algotrading” apis that allow you to connect to data providers and essentially do your own quant research. You can connect to the paper trading platform and trade with your own strategy to test ideas, or go on the live market. I was initially doing it get used to working with creating trading strategies and because it’s a fun challenge.
My question to you is, how hard is it for retail traders like me, to make any real money when trading live? To me it seems quite difficult because of the asymmetric information that these large firms have over me, so it’s quite hard for me to get any real edge. I do this mainly has a fun hobby, but I wanted to get your thoughts on if there is any real way for me to make money at all retail algo trading? I’ve heard mixed opinions, but something tells me if I wanted to actually make real money with trading I’d have to do it the traditional way with ETFs etc vs the algorithmic retail trading.
You're spot on. The big firms have more data, server speed, and human expertise as they have full teams. It's great for either a hobby or gaining experience. Also if you had a great strategy, you'd make more having investors as you could scale the profits.
@@DimitriBianco gotcha, do you think as an undergrad I could learn any really applicable skills from doing algotrading that could help me in the job, ie, would actually trying to implement strategies increase my chances of doing better on the job? Or should I just focus on the math theory? For example sometimes I read papers on well known strategies (ie. Avellanadas pairs trading strategy).
@@prod.kashkari3075 I believe it will give your resume a boost. I would never hire someone with only 'book knowledge'.
@@the_notorious_bas thanks. What are some questions I should be prepared to answer in my interviews if someone was to critique one of my projects
@prod.KashKari I haven't worked as a quant myself, but I'm sure Dimitri can answer this or search for quant job interview on YT, best of luck!
Can you talk about day trader vs quant trader? Which one is statistically more profitable.
There are too many variables. In general is hard to make a living without a team behind you. You also need a lot of capital to make it worth while. Search for Christina Qi in youtube and you'll get more info on hedge funds and trading.
How easy is it to get into data science after being a quant
wtf? u already in quant, why there is need to be ds? they are paid similar.
@@wangzhe1841 I'm not yet a quant and want to know if the career prospects for data scientists get better, then how hard would making the shift would be
Hawt Sauce then both isn’t advisable for u. Both is Super hard to be. Choose another career if u want easier life
@@wangzhe1841 but I like stats, computer oriented research, any other field you would suggest
It's easy to go from quant to data scientist. The quants are already using data science. For example, I've been working with GBM, random forest, decision trees, neural networks, and a bunch of other methods from stats that people consider data science. I think the quant will absorb data science in banking and finance.
So are you allowed to trade whatsoever on your own if you are a quant?
No. Quants will have the same restrictions because they are generating the strategies.
I've always wondered this too, sell signals in a anonymous telegram group while working as a quant
Next video:
Some realistic ways to make a million dollar in 10 years
Be a pro athlete?
To make a million dollars over a 10 year span isn't hard for quants as you'll earn more than $100k in the US. If the question is how to make a million dollar salary in 10 years from graduating school there are endless answers but all have very small probabilities. As mentioned below a pro athlete is one, choose the right stock and investing everything in it is another, start a business that has a product everyone wants with high profit margins, and the unrealistic list could go on.
So your saying that the best way to become rich is to be your own CEO(business owner) or getting an MBA and become one
ceo and business owner are different
Very true @smenary451