Prop Trading is Where it’s at

How much do you know about prop trading (PPT)? If, say, you were given an opportunity to dive into the equities, futures and options market for an hour – how far would your skills take you? As haphazard as prop trading may seem at times, there is definitely a method to the madness. Knowing enough about this can be the key to success.

Learning about prop trading by yourself would be quite a feat. The wealth of information that is required to even start to comprehend the intricacies of this work is beyond the scope of what simple manuals or extra-quick courses may offer. To truly appreciate the scope of the skills to be honed and habits to be developed, one needs access to training materials based on real life experience in the markets, as well as direct opportunities for practical application of everything learned – albeit in a simulated environment.


Without proper practical training, one is very likely to acquire skills more suitable for the black market, or shady hedge funds, than a position at a respectable international financial institution. What makes appropriate prop trading (that is in line with the regulations and needs of the day) stand out from risky ventures that are not linked to any notions of market liquidity and stability, is the coherent and masterful use of complex quantitative models and algorithms that remove the subjective human error component from the equation. Respectable prop trading firms would never allow for their various departments to blend together, so as to create notorious conflict of interest situations and open themselves up to rightful criticism.

The Internet has certainly opened a great new venue for research on the potential training and expertise opportunities available. New technology makes it possible to avoid in-class training and focus more on the practical application of what you are being taught. Prop trading training, just like any other, can be both good and bad, and it is in your best interest to differentiate the good from the rest, which should be ignored. When choosing a venue for your training, consideration should be given to a number of factors, among them: years of experience, past history of success, and place in prop trading and other ratings – including those put together by well-respected analysts, such as Forbes.

One should not expect great PPT training from someone without true experience out on the market floor. Beware of strongly-worded advertisements offering quick learning and quick wealth – alas, this is not how the prop trading world works. Learning the art of prop trading should take time, and it does. After all, it is not a pleasure stroll to really get into index, statistical, volatility and merger arbitrage, fundamental analysis or global macro trading. Diving into any of these things without due preparation is not simply dangerous, it is potentially devastating both career-wise and in relation to the law. Avoid unnecessary problems by taking the time to do your training at a respected venue that can guide you throughout the process, and will not abandon you on the final day of training.

A word of caution about any guarantees you may come across in regards to placement assistance at the end of a prop trading course: don’t believe everything you hear. Placement assistance is a great thing, and many successful traders were, in fact, first noticed by the larger firms during their training. There is, however, no placement guarantee anywhere, nor can there be. The markets are always in motion and so are hiring needs. If someone starts talking about definite job offers in the middle or even the beginning of your prop trading training, take it with a grain of salt.

If you can take the brave step into prop trading, you will embark on an exciting journey into one of the fastest-growing and developing parts of the international market. Do your training well, and you are bound to be successful in both finding employment and building a positive reputation for yourself for years to come. The effort you put into the training now will serve as a stable foundation for your future as a trader. Extra knowledge never hurts anyone, so good luck and see you on the trading floor!

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