I spend a lot of my time looking for people who will make talented traders. Every month we take on 10-15 trainees of which only 2-3 will be able to perform consistently as a trader.
Finding good traders is an increasingly challenging business. Once upon a time it was fairly easy to make money trading. Six or seven years ago, it was all about arbitrage. Anyone with a bit of intelligence could spot a discrepancy in prices between two markets and exploit it before it closed.
Nowadays, algos have closed that gap. The barrow boys and scalpers have been forced out. Trading today is about having a macroeconomic perspective on events, an understanding of complex products, and an appreciation that pure economics doesn't always work. You need to be streetwise and to understand that the market is subjective; people's fears and expectations are priced in.
Equally importantly, trading has become about psychological robustness. Algos can add a lot of volatility to the market. Sometimes that volatility can appear incomprehensible. If you lose your calm and let yourself trade emotionally, your career as a trader is going to be very short.
The key is therefore to find the Holy Grail: someone with the self confidence not to go to pieces when things go wrong, an understanding of financial markets, and the control and discipline to get out of a strategy in an ordered manner when things aren't going to plan.
We currently have 18 traders and are always interested in finding more. Most of our traders come from an economics or scientific background, but we wouldn't rule out numerate arts graduates with the right personality profile. Trading these days is increasingly a question of psychology. An understanding of the markets can be taught. Temperament can't.
Will De Lucy is managing director of Amplify Trading, a trader training, research and proprietary trading house. He spent eight years working as a trader for US prop trader Goldenburg and Hehmyer.