Originally Posted by otc
Most young traders, especially prop traders are trading to their firms model. They didn't come up with the model, that was the guys who started the firm.
I'm not saying it doesn't take skill (welding is also a highly skilled trade...but also a place where despite the level of skill, 99% of the work out there is simply welding the things that someone else tells you to weld) but sitting around trading derivatives is very different from M&A type IBD stuff. You know the score at all times, you aren't thinking about how things will unfold in the future, you aren't pitching clients on your ideas being right, you are just trading away.
FWIW, I see a lot of the fulfillment stuff from people long before they quit or are layed off. They are in it for the money (and are honest about it)...they have some goal in mind. Pay off student loans, make $X money plus b-school tuition, use b-school to transition into a non-trading role. It works because 4-5 years at a prop trading firm (assuming you make it past the trading-assistant roles) can give you a pile of cash while not being such a long time that it limits your post-bschool exit opportunities. And they work 50 hour weeks (usually without weekend time) with lots of time to party.
Maybe it is different in London, but that is how it seems in chicago for the guys trading on the CBOT/CME.
If you're thinking prop shop in Chicago, I can kinda understand why you'd think that, especially if you've never tried trading.
Chi-town is kinda it's own thing. New York has some of those chop shops but I feel like they more grew up around the exchanges in the windy city.
There are a bunch of stories about guys who got staked with a couple grand and turned it into a hundred million dollars. And there are thousands of stories about guys who have gone bankrupt three times before the age of 32 trying to do the same thing.
Chop shop life is - from what I've heard - 10 times more intense than trading at a bank. You have very little capital and strict limits and you basically have to make money every day. The stress must be incredible and I imagine the burnout rate makes banks look stable.
The guys who can do that successfully, and they are few, are basically trading superheroes. I alternately love / hate reading Market Wizards (cheesy name but great book) which is all about those guys. There's some useful advice and lots of chances to look at your life and shake your head in disbelief of your own mediocrity.