How To Become A Quant Trader
Quantitative trading is an extremely complex
and lucrative area of finance that utilizes complex algorithms and mathematical models to predict patterns in the market and spot prime trading opportunities.
Quantitative traders, or “quants” are in high demand throughout the financial industry due to their unique combination of skills in computers, finance, statistics, and mathematics. Is quantitative trading and investing right for you?
If you’re interested in becoming a quant trader, here’s what you should know.
What Is Quantitative Trading?
Quant traders and investors gain their edge in the market by utilizing modern technology and comprehensive databases regarding things like price and volume to build mathematical models of a trading technique or complex financial situation.
Quantitative analysis can involve both simple statistics and complex calculations as part of its modeling. The ultimate goal of quant analysis is to predict real-world events in the market, which can help quants price securities, time trades, perform risk assessment, and mitigate the financial risk of a given investment strategy.
Is it any wonder that quant traders are often seen as having the most prestigious skills in the entire finance industry? Their ability to transcend the ordinary ups and downs of the stock market by looking into the past and using what’s there to predict the future seems nothing short of amazing!
What Technical Skills Help Quant Traders Succeed?
Quant trading isn’t for everyone.
If you don’t absolutely obsess over numbers, enjoy picking through data, love studying complex graphs, and have exceptional mathematical skills, then quant trading and investing is probably not your game.
While it is always helpful to have a college degree in mathematics, statistics, economics, or finance if you want to be a quant trader that isn’t always necessary. Indeed, some quants do have higher-level degrees in things like quantitative financial modeling or their Ph.D. in a similar, related field. However, there are many quants who lack advanced degrees. They simply have other characteristics and experience that makes them good at quantitative analysis.
Experience as a data analyst in virtually any field.
Data mining skills, regardless of how they were developed.
A solid foundation of study in automated trading systems.
Strong research and analysis skills and abstract thinking.
A good understanding of programming languages.
A comfortable foundation with broker trading platforms.
Risk-management and risk-mitigation training.
What Personal Characteristics Make For A Good Quant Trader?
It’s important to understand that quant traders also need certain soft skills, in addition to their technical knowledge, to be successful (although there’s really nothing “soft” about these particular skills).
Soft skills are those “difficult to define” traits in a person that are often harder to develop than technical knowledge. With enough training, effort, determination, and time, you can start from anywhere and acquire the practical knowledge that it takes to become a quant trader. You may still not succeed in your goals, though, if you don’t have:
A willingness to fail badly, if necessary — in the short-term in order to succeed in the long-run.
The capacity to approach every setback or failure as an opportunity to learn, grow, and gain new information that’s ultimately useful to your goals.
An ability to not only survive the aggressive pressure cooker of the financial market but to thrive in it.
The capability to maintain your focus and determination over long, intense hours.
Not everyone has the temperament suited to become a quant trader. The ability to adapt to constantly changing environment and the strength to abandon a technique that isn’t working can be deciding factors in a quant trader’s success. It also takes some serious inner mettle and resolve to forge ahead with a series of trades knowing that the majority of your trades may produce informational gains but financial losses as you look for the right openings in the market.
You have to have a remarkable amount of faith in yourself and a capacity to stay focused on the long-term gains, rather than give in to the distraction of your short-term losses.
Nothing stays static in the trading world; no one technique will make money for long because every successful technique is quickly imitated. A true quant trader has to be ready to innovate at all times and seize each profitable opportunity that comes along.
Where Can You Get A Start On The Basics Of Quant Trading?
Even if you have never looked at the stock market before in your life, you can become a quant trader. It doesn’t matter what age you are, nor what technical knowledge you have at this time — as long as you have a willingness to learn and the right teachers.
You also don’t have to spend a fortune obtaining a degree through higher education — because there are other options. At Triforce Trader, we have all the technical information you need to learn organized into courses through our virtual classroom. Part 1 of our training is designed to teach the basics of trading, from the ground up. It’s a starting point for the beginner and a way for someone who is more experienced to strengthen their core of knowledge.
Once you have a solid foundation in the fundamental skills of a trader, you can move into Part 2, which is where our classes dive deep into quantitative analysis. We break what seems like a mysterious process down into steps and show you where to begin working for yourself.