By Viraj Bhagat
The life of a trader:
Exciting! Yet subtle! With one hand on the Accelerator, but with one on the Throttle, Nerve-wrecking! Yet Soothing; Challenging, but absolutely Encouraging.Being a Quant, when it comes to trading, you’ve probably been there, done that or perhaps even done it all. There’s no way you’ll turn your back on the thrill and adventure. But here’s my question and tell me if you’ve asked this to yourself before: Where do you go now from here? And how?
When trading started, there was a huge market share but few traders who would reap larger benefits. As word spread, lo and behold! It was the same market, but fewer shares and more traders. The existing ones had to either adapt to survive or perish. You certainly would not want to be the latter.
We all want to stay ahead of our game, but after some point in the market, things look redundant and you get a feeling of being out of place. Although you’re good, you wonder: Is being Good, enough?
I say: Why to be Good when you can be Better!
There are always some qualities, tips, important facts and surprising stories that will come in handy and not everyone can access all of it at once. I bring you this list of the most practised skills and qualities you would be able to relate with successful traders. Comment and let us know your thoughts on what you feel could make it to this list.
Here we go!
Think like a Businessman
Problem-Solving Skills, Quantitative Skills, Trading Strategies, etc. are just ‘means’ to achieving the excellence of being a Quant. Trading is, after all, a Business. To understand a business, one needs to be thorough with it – to be able to understand concepts, technicalities, and jargon. With a multitude of factors at play one has to be aware of the what, where, how and why to successfully understand the business requirements and doing what is necessary for the business to survive, thrive and flourish. Don’t think from a trader’s point of view, or a Broker’s, or an Employee’s. Think of it like you own the business and what could be done to skyrocket it to success and growth.
Be Technologically Sound. Not because you should, but because you must!
In some cases, quants aren't really "quants” but they are either a desk analyst, desk developer, risk manager, traders, strategists, portfolio analysts, or pricing analysts, etc. For someone who is already a Quant, it is necessary that you are updated with the know-how of any and every technology that pops up every now and then. Anticipate the need and gain knowledge for that tech ASAP. Who knows, you just might have the first mover advantage in the market over your competitors. The quicker you learn, the faster you can adapt to the changing environment and be prepared for the worst-case scenario. It should not be the case that one gets left behind only for the reason that they did not stay up to date with the technology.
Quantitative Analysis Excellence
What separates a Quant from the lot is their capability to understand beyond the market and their ability to look beyond codes, numbers, and charts.
Outsourcing of activities, Automation of tasks and processes, and the availability of programs that make Trading easy for you are easily available today. Alas, that does not define your qualities and skills as a Quant. Anyone could purchase such services and trade. They should be able to single-handedly break down and decipher programs, understand nuances and decode issues. they should also be able to improve performance based on their skills, logical reasoning, techniques, problem-solving superiority and path-breaking derivations. Quantitative skills are crucial to the breakdown and the build-up process of systems, codes, and strategies.
Check. Optimize. Repeat.
Don’t just be another random quant out there. Be a part of the market – Be one with it
Once established as a Quant, the buck doesn’t stop here! One needs to blend in the market, maintain a good repo with Traders, other firms, etc. and practise healthy communication skills. This would bring about extensive and interactions, feedback and even criticism from all around you exploring the minutia of what you could be doing better, where you went wrong, what are the market happenings, what’s cooking in the near future and the likes of it. This will help you optimize your business, technology, strategies or techniques to perform even better, and build a good business relation at the same time. But, one must understand, that there are no one-way relations. You must maintain your affairs consistently and repeat the process.
Going forward is the only way. It is either Evolution or Extinction.
Your strategies, techniques, technologies, and knowledge would someday get old. At the current pace of technology, strategies, for example, struggle to survive as they are quickly replicated. Complacency will make matters worse. Read. Learn. Upskilling ensures you stay ahead in the game.
Self-analysis helps identify the skill-void which can be filled by gaining certain skills through courses, training, certifications and lots of Practise. Learn how Artificial Intelligence, Internet of Things, and other emerging technologies would play a role in developing the future. Machine Learning or Deep Learning, Financial Engineering, Econometrics, Time Series Analysis, etc. are some the most helpful and future-ready skills. Even the preferred programming languages in this field change over time. Currently, the most used language is Python.
ConclusionThere are many traits associated with people that often lead them on the path to success and spell the difference between winners and losers. These are just some of the skills which would be essential and be critical for anyone to flourish. Situations, market conditions, regulations and multiple other factors shape the market and economy, and that often cascades into a domino effect. That’s where you can be strong, make yourself more capable and worthy.
You could be a part of a more comprehensive program that covers various aspects of Algorithmic Trading, provides guidance from Experts in the industry, has a strong Support Team, and a vast Alumni base like the Executive Program in Algorithmic Trading. EPAT® covers training modules like Statistics, Econometrics, Financial Computing, Technology, and Quantitative Trading to equip you with the required skill sets to be a successful trader.
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