Trade Talk: what is it really like to have a career as a trader? And what's the best way to get into it?

To find out, we sat down with three members of the Brokerage Alumni Network who gave us a candid insight into the enigmatic world of trading.

Can you tell us more about your trading careers to date?

Dhilan: After completing my degree at LSE studying economics, I started the graduate programme at BNP Paribas Investment Bank within Fixed Income Trading mainly trading short term interest rate products including Bonds, Repos, Futures and Swaps. I spent six years on the trading desk before taking on a new challenge (and project) at a Canadian bank where the endeavour is to help develop the European short term rates business.

Debodun: I studied MORSE (Maths, Operational Research, Statistics and Economics) at Warwick and went straight into the deep end managing a trading book at Goldman Sachs – market making equity swaps and trading derivatives to finance excess inventory. Prior to this I’d completed three internships – two through the Brokerage at HSBC (Operations) and Santander-Abbey(ALM), and one directly at Barclays Capital in Rates Trading. I’m currently working in the Fixed Income Repo side at Barclays Capital after a 2 year stint at The MET Group trading short term interest rate futures.

Xavier: This is my first real trading opportunity and it has been an interesting one. I started off on the Asia-Pacific desk, working nocturnally to service clients for business in that region. Within my first year I was promoted to AVP and more responsibility came with it. I went from monitoring and reporting orders on behalf of my colleagues, to becoming a hybrid portfolio and electronic execution trader dealing with Cash Equities, ETF and FX products. I now exercise these responsibilities in the European, Middle East and African markets.

What inspired you to become a trader?

Xavier: My first internship through the Brokerage was at Bloomberg, and although it was not a trading orientated job, I learned a lot about the industry’s culture, nature and characteristics from the client visits. Obviously, the money aspect is always going to be a factor of inspiration, but the fast-paced, time pressured career path was what I found most attractive.

Dhilan: Following my summer internship at UBS via the Brokerage’s City of London Business Traineeship programme, I was called back the next summer to work within the Project
Management team – it was here I realised my skills and interests lay within trading. I initially liked the idea of M&A but quickly realised that the hours of work (most days past midnight) did not suit me at all.

Debodun: Similarly, my first taste of the trading floor was during my internship via the Brokerage at HSBC. I was fascinated by how busy it was and the multiple screens everyone seemed to have. I didn’t know too much about trading at that point so sought to read some books and do some more research. I particularly found Market Wizards by Jack Schwager an interesting read, and after my internship I started to navigate my career interest towards trading – I felt sure that’s what I wanted to do.

Can you summarise what a trading role actually entails?

Dhilan: In general, the main features involve (with each holding different importance depending on your exact role): 1) managing risk (understanding all the potential risks that you and your team hold), 2) coming up with ideas (this involves a lot of reading the news or research and talking to clients), 3) taking positions (either short or long term within your specialised product), 4) market making (very quickly providing a price to the clients of the bank at all times). So you will certainly need to be accurate, quick, creative, confident and a team player. But I cannot stress enough that it is very different in each bank, and each desk.

Is it what you imagined it would be like?

Debodun: Not at all. I always saw trading as primarily a proprietary function where you were given an amount to invest and the aim was to make as much money as possible. In reality, however, whilst there is some element of risk taking primarily the bulk of trading tends to be facilitating clients like Hedge Funds or Real Money accounts. The example I always give is Hedge Funds are like punters that go to Ladbrokes. Investment banks are like Ladbrokes – we make the prices and the punters place bets.

Dhilan: No. I haven’t actually traded in a ‘normal’ market. There has been one crisis after another, which has forced banks and trading floors to constantly evolve. Like Debodun mentions, regulation is a big driver now which is changing the landscape of trading and the day-to-day activities of most people.

Xavier: Actually for me, it’s not 100% what I expected it to be like but it’s pretty close.

There are highs and lows in any job – what does a “good day” look like to a trader? What does a “bad day” look like?

Xavier: A great day could be if the revenue generated that day is above $400m-$500m. A good day can also be when a session is seamless from start to finish. A bad day is if (or when) a trading error occurred (Oh boy!).

Debodun: A good day is one where everything runs smoothly – revenue is generated, systems are great, and you’re busy. A bad day is one where you leave the office not looking forward to tomorrow either due to system issues, revenue loss, difficult client conversations or an operationally heavy day.

You’ve all been doing this a while, you’ve obviously got the hang of it! What’s the secret to being a great trader?

Dhilan: Ha ha I’m not sure I would say great! I think part of it is being smart about where you work and even which team. I have seen many smart people leave as their team/banks were not the right fit for them in terms of personality. Also you need to adapt to the team, and try and learn as much as you can in the early years – especially from those who have worked in the markets for 10 years or more.

Xavier: I’d say being honest, having a thick skin and being patient. Having a short memory can also help – by that I mean if something bad happens, learning how to move on quickly
and bounce back is important.

Debodun: You have to stay ahead of the curve. Always look to self-improve. Think how you can make your days easier, how you can ease into the next stage of development whether it be taking on more risk, more responsibility, managerial roles, etc. Always have a 2-3 year plan, and renew it every 2-3 years, and of course work extremely hard. Finally spend time growing your network internally and externally at all levels – both senior and junior to where you’re at.

It does sound stressful – is ‘burn out’ an issue? Do your colleagues generally see this as a long-term career?

Xavier: Some people do see this as a long-term career. We do certainly get burnt out; I find a holiday is always the cure! It also helps finding a hobby to balance out the stress, or even just something to look forward to over the weekends.

Dhilan: I agree, many people see it as a long term career with good opportunities. But I guess ‘burnout’ can happen, and does happen, but like any other job if you don’t enjoy it, you
should move. There are actually many transferable skills you would take with you into other jobs – decision making, working under pressure, managing risk, innovation. Personally,
if I ever left I would most probably dedicate my time to starting my own business.

Debodun: Every trader is different; many traders want to trade in some capacity for as long as they can in banking before moving over to the buy-side (hedge funds), whilst others
see it as a short term career with aspirations to move into management or leave the industry to start a new business venture.

Lots of students join the Brokerage Citylink dreaming of one day being a trader in the City; what advice would you give to them?

Debodun: Academics are important – don’t go into university aiming for a 2:1, aim for a 1st class and work as though that’s what you want. Even if you don’t make it at least you have put in the right approach. Also, do your research to check if this career actually matches up with your skillset and if you have a genuine interest in it. Learn as much as you can, ask questions and put some time into preparing for a trading career. There is a lot of material online now through Wikipedia, Investopedia, Forex Factory etc. It goes without saying that you should apply to trading roles too – but remember the best traders can bounce back from setbacks, so don’t be discouraged if your first few applications get rejected. Learn and persevere.

Xavier: It is a very competitive job to secure, however do not be discouraged if you do not find your dream job right away. If you do secure an opportunity, it may be difficult to
start, but you always have to keep your end-goal in mind. Once you are in, ask yourself what motivates you. Some people are motivated by money, some people are motivated by responsibility, credibility, power and the ability to have more choice to do whatever they like without limitations. As mentioned before, you have to always make sure you are honest, goal driven and optimistic about every inch of your career growth. Finally I’d say that the market has changed drastically since the 80s and 90s and it is not as glamorous and flamboyant as films and TV shows might make it out to be. What hasn’t changed however, is the requirement of hard work and a tough mentality, and although it could get messy at times it will definitely pay off.

Dhilan: “Without a dream you get nowhere”. I really am a believer that even if you don’t have the best start in life, you can make your own luck. I will let you into a secret – during one of my internships one of the managers told me that even working on a trading floor wasn’t suited to me, let alone becoming an actual trader.

 

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