How can I get into algorithm or HFT trading as an entry level software engineer?

Updated on : January 20, 2022 by Alfie Doyle



How can I get into algorithm or HFT trading as an entry level software engineer?

Hi guys, I have worked for about a year in a trading company doing market and realized that I have more interest in algorithm / hft trading, automated trading and thinking of making the switch to a more focused type of trading work in programming. My academic background is a technology degree and I have no prior experience in software engineering. I recently saw the scope of work and found that all of these jobs require some experience in low latency system, low and high level optimization, etc. and I don't have any of those experiences or skills. Does anyone have any tips on how to make the switch? or have you done it successfully? Or is it too late to make the change?

For almost 5 years, I was a trader at GETCO, which was the main dominant HFT company. I was recruited from MIT and didn't know what to expect when I joined the company of ~ 100 people. Luckily for me, I found the job enormously satisfying and I can't imagine a more fun time.

From an intellectual perspective, the problems are just as satisfying and difficult as you might find anywhere else. There is as much math, game theory, economics, technology, computer science, and engineering as you want. The technology is cutting edge. HFT is the engine of many technological advances. Also g

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For almost 5 years, I was a trader at GETCO, which was the main dominant HFT company. I was recruited from MIT and didn't know what to expect when I joined the company of ~ 100 people. Luckily for me, I found the job enormously satisfying and I can't imagine a more fun time.

From an intellectual perspective, the problems are just as satisfying and difficult as you might find anywhere else. There is as much math, game theory, economics, technology, computer science, and engineering as you want. The technology is cutting edge. HFT is the engine of many technological advances. It also generates and requires a large amount of data.

From what I've read about different industries, HFT is more like working on Google search - finding signals to predict what users are looking for is similar to finding signals to predict where the market is going. Tackling both problems requires a great deal of technology resources, deep thinking, superior software and infrastructure, and intense computational power. Even compared to working at a fast-paced tech startup, my impression is that much of the work at many tech startups doesn't require a lot of deep thinking. Unlike many banking or consulting jobs, HFT does not make outlets or talk to clients.

HFT is extremely entrepreneurial because the "make money from trade" problem is ill defined - no one tells you what to do because there are so many ways to approach the problem and so many things to consider. You don't have to wear a face or a suit - it's all about results. And you can't fake your results or cheat your way in your work; everyone can see how much money you are making.

Before joining GETCO, I read Liar's Poker and never saw anything of that macho, elitist world. Rather than being a BSD, I think trading is about humility and curiosity, the willingness to test your ideas and accept feedback from the markets. It's human nature to surround yourself with men who say they do validate your ideas, but the trade is about trying your best ideas to the fullest and finding out when they don't work. Competition and a low barrier to entry give the best ideas a chance to succeed; It is the most "fair" environment you could imagine. If your ideas work, you will earn money. If they don't work, no matter how loud or how good a reality distortionist you are, you will lose money.

Unlike my friends in academia, who work through a big problem for years with no end in sight, HFT provides immediate feedback. Your models are making money or not. If it lags, it is obvious in a few weeks, whereas in many other industries it may take years before obsolescence clears up. I like to see the direct results of my work, and for me, being able to test my ideas quickly is one of the most satisfying parts of HFT. If you're wrong, you find out right away and can try a new theory; You don't get left wondering if what you did matters or not, if you're right or wrong: the idea either translated into more money or it didn't.

Trading is a constant challenge because changing markets ensure that there are always interesting and difficult problems to work on. I find this satisfying because I can easily get bored. I like to do experiments, I like to get results quickly, I like to be quantitative and technical, and I like to always learn something new. What is more satisfying than that?

HFT is extremely competitive. As much as high frequency traders like to distinguish themselves from other people in finance, even other types of traders (we are not click traders or flow traders! As anyone outside of finance knows the difference ...) and they see themselves as nerd and a gang. Besides, the fact is that the entire industry is relatively ruthless because it is dealing with huge sums of money and has an industrial culture of secrecy and competition. Everyone is your direct competitor, sometimes even people within your own company. This can be stressful, but I find it exciting and motivating.

HFT gets a bad rap in the media, which is not surprising considering that the news is financially incentivized to misinform, generate controversy, and elicit valence emotions such as anger and outrage. Trading is complex and many people don't know much about finance, but our financial system affects everyone's life, which is why it is often featured in the media.

As a result, HFT suffers from a valley of complexity: if people don't know anything about it, when they hear it in passing, they don't understand it and don't think about it much; if people think about it a bit and read news articles about it, when they are philosophizing from an armchair they hate it; When people are actively involved in algorithmic trading and e-markets, they become obsessed with it and want to integrate it with all aspects of their existing trading. Why would it persist in forcing a human to do what humans are not the best at doing, namely fast and complex calculations, aggregating and analyzing terabytes of data, sending and processing numerous data feeds simultaneously?

The most important issues fall into the valley category of complexity, but because getting to the other side of the valley takes more than 140 characters, all politics and many important economic and social problems have degenerated into fragments designed for everyone to have. an opinion. Who wants to read an article that can only be accessed if you've put in your 10,000 hours? Those articles do not receive visits or retweets; It is easier and more profitable to write something blatantly false or misleading so that everyone can dive into their gut judgment.

When people as esteemed as Mark Cuban and magazines as excellent as The Economist (probably the best magazine of the moment) write things that show how surprisingly confused they are about automated trading, I wonder what hope there is for the rest of the world. But somehow this negative media attention brings his team together because they are the only ones who understand reality. I try to distance myself from the news so that I can afford to find bad articles funny rather than infuriating.

Opacity and intense secrecy contribute to most people being unable to relate to their work. This can lead to an awkward conversation at the party, whether it's because someone asks you if you should buy gold instead of AMZN, or why you caused the sudden collapse, or why you cut your grandmother's pension fund. When most of the world, including some of the most educated people with PhDs, cannot tell you why the stock market exists or how it is important to a first world economy, it is no wonder that many people cannot tell you what it is. automated market creation. is or how it helps consumers. When people ask what your job is and you say you are an algorithmic trader,

These concerns that revolve around relating to other people outside of your team, such as being able to explain your job to your mother or tell her how much you are earning, require that you feel comfortable doing what you want to do, being motivated and motivated. . When you're in finance, some of your friends will joke about selling themselves, and you don't need to be especially concerned about what other people think. Otherwise it should be a childhood cancer doctor or something where it is more obvious how you are contributing to the world (assuming you care that people think you are adding value to the universe).

Something that I consider in an abstract way is the growing speed race that demands increasing infrastructure costs. Philosophically, there could be some question as to whether even the most technically advanced naturals care about the difference between 1 and 2 microseconds. Also, it's the kind of thing that a simple change in the exchange's microstructure could render irrelevant, so this aspect of the industry could change a lot as the industry evolves and grows. I do not see this as satisfactory or not, it is just characteristic of a business as new as HFT for which regulations and best practices are still being created.

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