Tips To Start Your Own Business In Algorithmic Trading

4 min read

Tips to start your own business in Algorithmic Trading

You are doing well at work but have always felt that need to cater to the aspiration of doing something more, building something of your own? You are passionate about the chosen field of work. You have already explored different organizations and their work processes extensively.

Entrepreneurship seems to be the only logical step ahead. The only concern is how? The basic questions that you need to answer are who else and how did they make it happen. A situational analysis helps you put the best foot forward. Derek and Maxime, finance experts from two different nationalities were connected during QuantInsti®’s Executive Programme in Algorithmic Trading™.

Similar work experiences and life goals initiated a friendship which led to a business venture. Golden Compass, Derek’s quant research firm is doing excellently and is one of our hiring partners. Read on to know this story of career excellence and entrepreneurship in detail.

Here is an account of our interaction with Derek

Tell us something about yourself?

I have lived in China with my wife for more than 3 years. With an academic background in mechanical engineering, I started my career in trading futures working as runner and clerk on the floor of Chicago Board of Trade. Recreationally I enjoy sailing, games, snowboarding, and marksmanship. In a previous life, I was part of an international blackjack team and played poker professionally.

When did you discover your passion for financial markets? (Especially, quantitative and algorithmic trading)

I had been working in my family business and did not feel it fit my mentality. After playing serious amounts of poker and blackjack, it became clear that it was not a very socially acceptable career path. So I began talking to some old colleagues, about trading as I was considering going back to that. Once I was able to apply my gambling background with some of my engineering, trading background,  and the scientific method. The new “game” to beat was the market, and I have been hooked ever since.

How did you come across QuantInsti®'s EPAT™ programme?

I am always looking for new places to get ideas or to continue to gain skills and expertise. I think it was just by luck that I clicked on the link. At that time there were not many reviews or blogs talking about the experience. But looking at the curriculum, I thought I would take a chance. That ended up being the correct decision.

How was your learning experience?

I think the program is quite rigorous. However, it does take some serious time commitment. From a content standpoint, it was excellent. The creation of the alumni cell after our cohort, I think kept a feeling of support after graduation. Coming from an Asian perspective is very differentiating compared to what you may see from the USA or Europe. Also being able to connect with clever classmates like Max was critical. This allowed us to share experiences and novel material giving us the opportunity to request the professor to allow us to work as a team for our final project.

When and how did you come up with the idea of starting your own quant research firm?

Now with the world being a lot smaller through the use of communication technology like Skype or Wechat, Max and I were able to continue to do research and development for 6 months. We then decided to meet in Bangkok, as our background in derivatives had aligned so perfectly. Both of us had a lot of experience working in futures and options, while a majority of the content out there is working on equities. We were taking a swim and in one of those relaxed eureka moments, we just decided “let’s do something”. Let’s take our collaboration to the next level.

How has been the journey so far with your initiative Golden Compass?

This is a completely new and exciting journey of discovering the world of entrepreneurship for me. Coming from a background of a PM and trader, moving to something like this that leveraged our team’s strength was really one of the big incentives. Also, our development of technology stack and infrastructure has been a huge part of our success. We have also loved the support we have gotten from QuantInsti®’s placement program, helping us get access to qualified fellow EPAT™ alumni.

How does the future look like? (For the venture and overall industry)

The commoditization of previous alpha has been and will continue to eat at the performance of fund managers. This affects all types of traders from HFT, the commoditization of speed to large equity funds where the cheap replication of smart beta ETFs puts pressure on fees and AUM.

For our company, we see this as a benefit as most firms will need to understand how they are actually placed in this new world. Our company can provide cost-effective research, development, and services that allow firms who may be under pressure to achieve performance in this new world. While also raising the floor to small and mid-sized clients, who cannot afford to open entire departments but still need this type of work to stay competitive or become obsolete.

How has EPAT™ helped you? Would you recommend it to others?

EPAT™ helped me by not only introducing me to Max but also allowed to interact with a growing community of alumni from more diverse backgrounds. If you are looking for a professional overview of the space, or already an expert looking at some new topics EPAT™ can help you learn something new. I look forward to seeing a continued growth in QuantInsti® as well as the network of clever people coming out of the program.

Hailing all future leaders and Algo-business aspirants

Shout out to all those who have a keen interest in markets, entrepreneurship. Get to interact with likeminded people like Derek and Maxime, enroll for Executive Programme in Algorithmic Trading (EPAT™). The course covers training modules like Statistics & Econometrics, Financial Computing & Technology, and Algorithmic & Quantitative Trading. EPAT™ equips you with the required skill sets to be a successful trader.

Next Step

We bring you an account of one of our EPATian, Mr. T K Raj who has been in the technical space for over twenty years, heading different business functions. Learn how he excelled in the field of algorithmic trading in our post ‘How To Become An Independent Algorithmic Trader?‘.

Interested in reading Maxime’s side of the story as well, click here.

Connect with Alumnus