How selective are prop trading firms?


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I know that Investment Banking is incredibly selective, with only the top schools really getting any of the positions. Is trading for a firm the same way? Would it be feasible to go from a Finance degree from the University of Houston (a very low ranked school, albeit with a solid amount of energy focused classes) to an energy trading position for a firm (any legitimate firm or energy trading wing of a utility, don't really care) in Houston?

My guess is "no", but I figured I might as well give it a shot and ask. Thanks folks, and sorry for the nooby question.


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Fresh, prop trading firms are generally much less focused on the prestige of your alma mater and the GPA. They tend to focus more on the "brain teaser" interviews. Right now, the job market is extremely tight so they are being very selective, but you still have a decent shot. The business aspects of the finance degree won't help you, but stress your general quantitative skills.


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Assuming you're looking to break into the industry, you want to enter as an assistant trader. My former employer, SIG, has a phenomenal training program. FNY and Ronin are also great trading programs that hire ATs. If you could get into a big bank (e.g. JPMorgan) that'd be great, but those are among the toughest jobs. Some other well regarded trading jobs that might hire: GETCO, JUMP, Chopper, Gelber. If you have a very strong quantitative background you could try for Tower Research or Sun.


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Any tips on getting your profile noticed among the throngs of applications?


Established member
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To this date I have little idea as to how prop trading firms that only day trade manage to make a profit over time. It is extremely hard to day trade every day. There are a bunch of successful day traders but I know of a very few that actually trade 5 days a week and make a profit. High frequency trading or fully automated trading is different but for a human being to consistently enter and leave markets every day and fight the anomalies is very hard. Then again we need liquidity from day traders to keep running the markets.

Swing and position trading is how real money is made in the markets. I have yet to hear more than 5 names in the Industry of day traders that are making money. All big time traders and investors are either short term growth speculators or long term investors.

1. Short term price moves in a stock are powered by momentum and unknown speculations. This is where you keep it anywhere from few days to a week or two depending upon your exits. [Dan Zanger type trader, when he started and now hes more william o niel]

2. Medium term price moves in a stock are powered by strong growth and earnings of unknown companies. Remember a lot of times companies performing in short term time periods in my point above make it into this category. An unknown crap company can turn around and start showing great results quarter over quarter and then turn up in this category. There is where you keep it from a few weeks to a few months. [William o Niel type trader]

3. Long terms price moves in a stock are powered by social and business trends. This is where you keep it for 5 to 10 years or more. There is no real income in this type. Law of large numbers comes into play. It takes years for these companies to show a upward price movement what a short term or medium term stock can do in days or a matter of few weeks. This domain is for large mutual funds, pension funds that have billions of dollars and are more concerned in putting in assets that have slightly above average returns compared to a bank. [Warren Buffet type investor who buys complete companies whose business models he thinks can last for up to 50 years or more i-e coke etc.]

****Most money is made in short term and medium term trading above****

Having said all this I have respect for all day traders out there that try to make it every day knowing that its going to be another hard day at work.
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