Why I Didn't Go Into Trading

The question is often asked, "why didn't you go into trading?"
There are a variety of reasons for this but to really understand you have to understand my background, strengths, weaknesses, and how the trading world is in modern times. The stories of the past are the highlights of an old world. Sure they sound great as individuals seemed to conquer Wall Street all by themselves and made large sums of money. While many of these stories are true they only highlight the best stores instead of showing a realistic view. As quant finance as taken over this old world has changed a lot. Market dynamics have changed as technology has advanced and teams are now required to really take advantage of miss pricing or good potential deals.
Traders are also viewed as the people who create strategies and trade as if no one else is needed to run a successful trading or investing firm. This is far from the truth. Most firms have quants spending hundreds of hours doing research to generate a strategy. Then CS people turn those strategies into usable tools. Traders finally use those tools to make trades or monitor computers who do the trading. Traders need to be fast thinkers and quants need to be slow thinkers. I'm not a fast thinker so I'm not well suited for trading. I'm perfect for a quant role as I like to wrestle with a problem for months or years at a time.
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[@kade99TV]

One of the things I appreciate in you is the humbleness. You had the courage to admit to yourself you weren't a fit for a trader despite really wanting to become one. And thanks to that you were able to move on! A lot of people, myself included, have a problem with accepting they're not good enough in some area, because of ego issues and stuff.

[@DimitriBianco]

Thanks!

[@ThomasFoolery8]

I second this statement. I thought he was going to cope and rationalize about how the culture is rude, etc, but he openly said he couldn’t pass the speed interviews. He’s clearly smart enough to do deep quant work though because he’s a deep thinker more than a fast thinker. I’m the same way, so I’m also a quant and his point is very relatable.

[@piyushsoni736]

You just saved me a decade. Thanks!!!!

[@ameen2428]

haha, so true

[@cademcmanus2865]

This channel is amazing. Thanks so much for making all these videos

[@DuirBlack]

Great video and one super like for the honestly! ❤

[@abhishekprakash4793]

Thanks so much bro for explaining this with such clarity of thoughts and contexts

[@rohanthanki9855]

I am going to start my Financial Engineering masters in fall 2021 and I was confused as to whether to focus on trading or risk mgmt. I don't think I'd be able to get this insight in 20 hours of googling what you've covered in 15 mins. Thanks a ton Dimitri!

[@DimitriBianco]

No problem. I'm glad you found it helpful.

[@bustopgamer5802]

Best advice. We have to find our strengths and weaknesses and hone on to strengths to succeed. Not every artist is Picasso, not every businessman is Elon musk, and not every scientist is Albert Einstein but we all have our own role to play and life is too short to play someone else role.

[@krishnaprempasumarthy7295]

Amazing you've done the whole video in a single take, without any cuts!

[@DimitriBianco]

Sometimes I get lucky lol

[@airbound1779]

Again you saved from heartache and disillusionment

[@pf1793]

Thank you so much

[@Saooqwer31]

Love your Videos, one of the reasons I am studying math and got interested in risk.

[@ProAmerican-nh6nt]

Hi Dimitri, I love what you say and do! Respect.

[@DimitriBianco]

Thanks

[@oscargibbons9419]

HI dimitri, i just want to thanks you for all your videos and show how is the finance world, the hiring, education etc. Im a BA bachelor student in chile, southamerica and your channel has been very important in the process of choose my mayor, so thanks

[@DimitriBianco]

Thanks for the feedback and being a part of the channel!

[@ezprogramming7887]

@Dimitri, is trading the same on the buy-side vs sell-side? It sounds like you tried out sell-side trading.

[@benjaminbialy6284]

hey Dimitri, would a CS degree put you in the running for a trading job?

[@dmitry9435]

Could you please share your thoughts on benchmark rate reform?

[@alexh.lamarche9633]

One way to practice that, is to speedrun your exercises A friend and I used to speed run our exam back in Uni

[@Jay-qy6be]

haha, i had an experience opposite of yours. i was really into working on complex problems for long periods of time, and spent 3 years solving a single problem for my PhD. i went for research positions, but it turned out i had a knack for being quick on my toes and so they put me on the trading desk where i've been ever since (though i still contribute to research from time to time for my own enjoyment). some signs of possessing a natural talent for this i would say is if you perform well in time-restricted competitions such as the Putnam (i was a Putnam fellow), coding contests, and even WISC IQ exams, etc. are all good general indicators for if you might be a good fit as a trader.

[@MasterWestt]

Hi Jay, that's a really interesting path to the desk, well done. Do you think it's possible for someone with a compsci bachelors/masters and a real-risk retail track record ( say 1-2 years of journals tracking daily pre-market plans, recordings of sessions, post-market analysis) to get into a trader position somehow? I understand you may not just walk into a desk, as there are licenses and regulation - it's different in Canada vs USA - but being an outsider to the standard world of finance it's hard to understand how to get on a desk.

[@Jay-qy6be]

@@MasterWestt to be honest, i couldn't say. since cs masters are a dime a dozen, and so are retail traders. to make a fair judgment i would have to know more about your specific abilities as an individual and what you would be able to bring to the table for a firm that others can't, so that's usually what the assessments during interviews are for.

[@eugenedebs6272]

Hi Dmitri, I’m interested in maybe becoming a structurer for an investment bank; it’d be great if you could make a video on that if you get time. Like for instance, is it more fast-thinking like trading or deep-thinking like the role you do in risk management, what skills do you require, what should you read to better understand the role etc. Thank you so much, your vids are great

[@FcoManjon]

I would also like to hear about structuring

[@gkalou93]

@@FcoManjon Structuring sounds super interesting. Too bad the only textbooks I can find are from before 2008. The business must have changed by a lot since then.

[@asafteiandrei2957]

Dimitri can you do a series about prop firms for day traders?

[@vishalshenoy6493]

Thanks for a unique perspective, Dmitri! I have a question.. You mention implementing trading models in C++. With the recent and continued growth of languages like Python and R, which would you recommend an aspiring quant researcher to be proficient at, Python or C++? Cheers, mate!

[@shravanr8264]

I would say C++ for High Frequency Trading and Python for quant trading generally

[@alex_8704]

C++ or C is for the situation when you don't want to waste you CPU cycles, electricity, and computation resouces (to buy more computation power in the cloud or buy more workstations than you could). Python and R are extremely slow not only for production, but in some cases for research as well. However R and Python are convenient for certain non-production tasks, visualization, exploration of data, preparation of datasets, and for using standard _light_ statistical tests (for the latter, especially R, because the Python statistical modules are too immature, non-rigourous, and sometimes buggy). Numpy (written in C), and modules based on its structures, does make everything faster than on pure Python, sadly not so much as one could achieve on pure C++ or C. It's good news nonetheless that Python is itself written in C (not C++), so it can be easily combined with C code (call separate custom compiled C functions). My short answer: one needs to learn all C, C++, Python, and R. And if one is forced to work in Windows (server or desktop), then C# and .NET as well.

[@meteor8076]

For research and data analysis I would go with R, Python, Julia, SQL,... etc. it all depends on situation. If my data is stored in a relational DB of course I'll use SQL, if the data is somewhere on the web probably I'll chose Python web scraping. But the final implementation which will be my trading system I will definitely choose Java. Java is a very mature platform, and it is ideal for this kind of job. I would definitely avoid C/C++ mostly because it will require me to manage the memory myself, and this will increase the time-to-market. But.... my implementation most likely will have some kind of simulation like MonteCarlo, and here I'll use CUDA or OpenCL, and it will require C/C++, but only in this part of the system, everything else will be Java

[@lineage13]

I don't see any reason why 10x developers don't exist in quant trading.

[@grandcapo6449]

Is there any way you can teach somebody about Margin Call a little better or stocks

[@CR250RidR]

Can you make a video possibly explaining why you shouldn’t follow teachings of channels like ziptader, or clay trader? Is it bad to learn how to trade from them? They both talk about risk management etc.. like what’s the big deal if you’re just trading off of support and resistance?

[@spencerkessler9785]

Do you still think that an MFE is a good path to quant finance? I've recently read that PHDs are becoming even more commonplace and expected. I'm starting college next year planning to major in math and I'm trying to find the best path to get into quant finance. I've watched your videos for a few years now and I'd really appreciate your current viewpoint on this

[@DimitriBianco]

I will create a video response for this one.

[@spencerkessler9785]

@@DimitriBianco thank you! I'm excited to watch

[@umanggarg970]

One question I have is why do we need to be a quick thinker provided we're doing algorithmic trading and not manual trading? So we can take our time to build the algorithm. Isn't it?

[@DimitriBianco]

You still have to monitor your algorithm and decide if it is working. There aren't magical models that you just click run, walk away for a week and come back to piles of money. I'm not sure what country you are in but in the US there are a lot of rules about using algo models and monitoring is a key piece. Also the markets move quickly and you need a new algo/model fast. Often you can't develop very quick so traders can utilize overly simplified algos knowing they have issues.

[@umanggarg970]

​@@DimitriBianco Like here in Ireland, there are 2 roles in most firms, one of the trading analyst and one of the quant researcher, so do quant researchers need to be quick thinkers as well?

[@phuongdongcompany]

I think with trading, we sometimes need to solve problems in 5 mins, but some days you have several hours to solve problems. :).However, I love trading.

[@slymanmustafa134]

After finishing your undergrade did you think about going into investment banking

[@user-mt5uu4pz4j]

Omg I'm feeling the same way studying my finance degree. I'm planning to get FMVA before graduation to have a working foundation with excel. I thought I was the only one who thought the program is vague

[@HenryChewings]

I felt the same about my finance degree. So thankful I added a maths dual degree.

[@Voiveikkuli]

Hey Bianco, I was wondering what is your opinion on network theory and the use cases in finance and/or economics. I thought you might have some sort of knowledge about it if it's used in the field since universities have started using it to model systemic risk, and if you don't you might atleast find it interesting since its in the realm of Finance/CompSci/Math Maybe make a video about it if you find it interesting? Thanks

[@dovi77]

I know it's a late response, but I recently read a paper relating the interconnectedness of financial institutions to a modified version of the Barabasi model. Really interesting stuff.

[@vicchris3943]

Very few people are good as traders

[@karavanidet]

8:00

[@CC-yq6pl]

Anyone else getting killed with ads?

[@DimitriBianco]

KZbin has really up there ad placement. I'll take a look at this one though.

[@markcrisp07]

Go for longer term trends like SMCI,NVDA,. 25% p.a.

[@justchillman104]

Don’t want to be rude or anything but are you Jewish

[@davidc4408]

Why

[@justchillman104]

@@davidc4408 i think i was just curios

[@longhorndb]

You have to have street skills in trading, nerds don't typcially do well.