![]() ![]() If you do not have a background in mathematics or physics then I would suggest that you should pursue a degree course from a top school in one of those fields. A good class-mark in an undergraduate course of mathematics or physics from a well-regarded school will usually provide you with the necessary background. The usual suspects of multivariate calculus, linear algebra and probability theory are all required. However, the following advice is applicable to those who may wish to transition into a quant trading career from another, albeit with the caveat that it will take somewhat longer and will involve extensive networking and a lot of self-study.Īt the most basic level, professional quantitative trading research requires a solid understanding of mathematics and statistical hypothesis testing. It is common to consider a career in quantitative finance (and ultimately quantitative trading research) while studying on a numerate undergraduate degree or within a specialised technical doctorate. It is extremely well remunerated and provides many career options, including the ability to become an entrepreneur by starting your own fund after demonstrating a long-term track record. It will provide continuous challenges at a fast pace. It is a highly intellectual environment with a very smart peer group. It is often said that it takes 5-10 years to learn sufficient material to be consistently profitable at quantitative trading in a professional firm. This is a significant apprenticeship and should not be entered into lightly. Coupled with this is a good knowledge of programming, including how to take academic models and implement them rapidly. More advanced knowledge is required for time series analysis, statistical/machine learning (including non-linear methods), optimisation and exchange/market microstructure. An understanding of the components of quantitative trading is essential, including forecasting, signal generation, backtesting, data cleansing, portfolio management and execution methods. An extensive background in mathematics, probability and statistical testing provide the quantitative base on which to build. The skills required by a sophisticated quantitative trading researcher are diverse. Although one can break into quantitative trading at a professional level via alternate means, it is not common. This often, but not exclusively, means training to a doctoral research level - usually via having taken a PhD or graduate level Masters in a quantitative field. ![]() The scientific method and hypothesis testing are highly-valued processes within the quant finance community and as such anybody wishing to enter the field will need to have been trained in scientific methodology. There is very little (or non-existent) discretionary input when carrying out quantitative trading as the processes are almost universally automated. Quantitative trading research is much more closely aligned with scientific hypothesis testing and academic rigour than the "usual" perception of investment bank traders and the associated bravado. Setting Expectationsīefore we delve into the lists of textbooks and other resources, I will attempt to set some expectations about what the role involves. In this article I will outline the common career paths, routes in to the field, the required background and a self-study plan to help both retail traders and would-be professionals gain skills in quantitative trading. Trading careers in a "parent" fund are often seen as a springboard towards eventually allowing one to form their own fund, with an initial capital allocation from the parent employer and a list of early investors to bring on board.Ĭompetition for quantitative trading positions is intense and thus a significant investment of time and effort is necessary to obtain a career in quant trading. Quantitative trader roles within large quant funds are often perceived to be one of the most prestigious and lucrative positions in the quantitative finance employment landscape. ![]()
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