Hello all,I am glad to have stumbled on this forum as this seems like a good place to come for advice related to my situation (hopefully I'll get a response!). Let me give you my background. I graduated with a bachelors in math and computer science three years ago and took a job as a software engineer without thinking much about it. At the time I was happy just to make as much money as I did. But over time I found my work became easy and then boring. I got to work on some interesting problems but once they were solved I had little interest in implementing the solution. I came to realize that most software engineering does not require much intelligence but rather knowledge and discipline. The part that was fun and challenging was run by people above me. For some reason I had become ambitious and was frustrated that I wasn't living up to my potential. I had figured that a large part of this was due to the fact that I was in a large organization working on a product with over a million lines of code, some over a decade old. If I could go to work in a smaller company on a smaller product, one I could understand and make an impact on then I would be much happier. But I also thought instead of jumping to another job I should question my whole direction.A little over a year ago my old car was dying and I needed a new one. I had saved up a good amount for a down payment on a Subaru WRX but came to realize it was just a car and I didn't need to blow all my savings and go into debt over a car. Instead I invested some of my money in the market since that was what my friends were doing and it seemed interesting. I used a simple contrarian approach and it worked well, I was up 40% in about 6 months when I was stopped out. It seemed easy. A few months later I tried without stops and gave it all back. Even with stops I would've probably lost it anyways, without information I was merely gambling. By this time I had become intrigued by the markets. It seemed like the markets were a place where ones reward was directly related to ones intelligence.I read a few layman's books including Market Wizards and I came away very confident that I had as much ability as any successful trader but what I needed was knowledge. It seemed like trading would be a very interesting and rewarding career so I set about trying to figure out how to get started. I read books on fundamental and technical analysis of stocks. These seemed ok. I don't doubt that some people have made money employing such techniques but they are not what I had in mind. They do not seem particularly rigorous nor did they seem to lend themselves to valuation of prospects, measurement of risk, or expectation of reward. I didn't want to trade in such a way where I just went by intuition (luck). I felt in order to develop a trading system I needed to learn more statistics, probability, and economics so that I could develop some basic models of how the world economy works and the relationships between markets, understand what expectations are behind prices, and identify sets of prices with contradictory or unlikely expectations. I would test those models and develop a money management system based on their robustness. I thought I could make money not by trying to know everything about everything but rather by having a few good bets where some markets were wrong bigtime and about to right themselves.I realized this would take a long time if done working part time at my current job so I looked into becoming a mathematics or economics PhD student. It was while surfing around university websites that I learned about mathematical finance and financial engineering. Browsing through the curriculum I was impressed that the material was fairly rigorous. I also began seriously dislike the idea of spending four or five years without a regular job and wondered if there weren't a better way to pursue my goals. So what are my options? (1) Pursue a PhD (2) Get a job developing trading software, preferrably for a firm using a rigorous approach (3) Start and work through corporate hierarchy to become a proprietary trader (4) Get a financial engineering/MBA in finance and get a job developing models.So what would you advise my next few moves to be? Assume that I can be self-taught anything and that I want to achieve my goal as soon as possible, even if it means a few lean years. I appreciate any advice.

This caught my eye:<blockquote>It seemed like the markets were a place where ones reward was directly related to ones intelligence.<hr></blockquote>Hold on to your illusions for as long as you can For someone in your situation, I would recommend one of the following two routes:1) Enroll in an MBA program in a top finance school. Make as many friends as you can.2) Enroll in a quant finance master's program at a top school. Take as many classes with top faculty as you can.I wouldn't suggest a PhD for you because my impression is that you are not that interested in academic research in finance, but route 2 would give you the option of continuing to a PhD if you so choose.You should be able to finance you educution pretty cheaply given where rates are right now.

"Hold on to your illusions for as long as you can"Ha, ha. I thought someone would catch that as I was writing it but decided to leave it in there. I'm curious as to why you believe that. Is it because you can be intelligent and be a poor trader or you can be nonintelligent and be a good trader?I should probably clarify a little and hopefully get a little more advice from you. I am actually quite interested in academic research. Before I had considered trading as a career I was also considering becoming a professor because I enjoy teaching and was inspired reading about Richard Feynman. But when I started to explore it the idea of it more I read more and more disparaging personal accounts. It seems that is often the case whenever I look into something. Academic life is marked by poverty, scant time for research, and the little time you do have must be spent on trendy ideas that have nothing to do with reality. With the case of finance it was reading books such as Liars Poker or FIASCO which give the impression Wall St. is populated by subhumans who make their money through innovative and not so innovative cons and scams. The negativity is what is loudest and although I know the picture it paints is a caricature, I must admit my enthusiasm is dampened just a bit. Should I take it as a warning and pay it heed or is it a test to see if I have enough determination?If I had to choose between discovering something unique and important or making a fortune doing something formulaic, I would choose discovery. But I want to accomplish both. I would think with trading I would have the opportunity to discover what has not been discovered and profit from it. Is this another illusion?Another question for you - do you think in today's age of the Internet and all the information available it is possible to become a self-taught position trader? What advantages does one gain being a proprietary trader over an indepedent trader? I would imagine funding is a big one. Feeds and historical data are not cheap for me. But how much time does a proprietary trader spend doing routine grunt work and how much time is spent learning and developing the ideas that will earn a profit? Does a proprietary trader have access to information that the independent trader does not?Thanks for your help.

My apologies, rbrogan, for misinterpreting your post. If you are interested in research for its own sake, then I did mean to discourage you from pursuing it through a PhD. However, if you know that your goal is to be a trader, then I don't think a PhD is the fastest route to get there. Most traders I know do not spend their time doing research, but rather interpreting and using the results of research that others have produced.I can not answer your questions on various types of trading except to say that having access to capital as a prop trader is probably far more important than having access to systems and data feeds. Without good access to capital, you would have to be willing to take on a lot of risk to make money. My experience working in finance has all been in research, so someone who has spent time as a trader should be able to give you more information.In my experience, being intelligent is not necessarily a handicap, but it is not necessarily an advantage, either. I suspect that if you look at any field closely enough you will see all the unwholesome things that occur just beneath the surface. Bismarck's quote about sausages and politics applies to all fields of endeavor.

Hi, Interesting question. Next moves. If you want to be a trader - trade. No matter how small - just do it. Start with a pound a point at the bookies, it does not matter. I got one of my early jobs by taking my option brokers place when he left. Another time I just stood on the CME floor watching the SP traders for 3 days. That led to prop trading jobs and that led to trading my own account (bonus) again for the subsequent 5 years. But before you trade, read everything that WD Gann ever wrote. Obey his rules for entry , exit, cash management. Live prices are now so cheap and the market so fast you probably must have them. The CBOT will give you real time prices for under 50 bucks a month and that gets you Dow futures , Bonds, Beans etc. enough anyway. see CBOT.com. ESignal are not that expensive and their charts are OK now. (Better than Bloomberg and maybe Reuters). Next - experience - If you were a a technician you would have had your eyes popping out of your skull on Thursday night 10th Oct 02. From the July 24th intraday low on the S&P you had 21 days up and 34 days down (both Fibonacci numbers) and you had the date October 8th - one of Ganns key dates, plus you had a key reversal outside day on the cash S&P. So from that you know the Dow will be Up and the Bonds will be down. Check the long yield chart and there is a triple top. (Yes I did trade them both and made about 100 percent on margin in 3 days) So you can program too, great. ESignal uses JavaScript so you can program trading indicators of your own and backtesting of trading strategies. Remember, this kind of Technical Analysis talk is still virtually heresy to most Quants so you have to say mean reverting instead of 50 percent pullback. : -) Join the Society of Technical Analysts. http://www.sta-uk.org/ and learn point and figure counts. If you want go the the software route, fine, order something like "Building Financial Derivatives Applications with C++" Robert Brookes, Quorum Books, for a practical intro to Excel DLLs. He uses Borland though. Also see the software forum for how to return an array from Excel. Arcane stuff. He runs a course. Do you trade for yourself or for a company? Which ever you can. Both - whatever. The benefit of trading for yourself is that if you "know" where Soybeans are going because soil moisture is 30 percent dryer than normal for 2 years then you can trade it. If you are a prop trader for somewhere, its likely you might be confined to trading a defined market only, say USD -EUR; which for the last few months would have sent you comatose. Maybe a hedge fund would give you more leeway; but they have to trade according to their appointed/publicised style too. But, if I was offered a job trading again I'd take it because you can have a 20m position and sleep tight. Take the Exams like a Series 3 or the Securities route. You can get a Series 3 training CD for 150 bucks. Its 4 weeks Vs 4 years. The Quant route can earn lots of bucks too but what is going to make your model for an averaging in look back chooser up and out forward starting barrier any better than the other guys? If you didn't spot Thursdays technicals because you were too busy with your latest DLL your desk might be on the street today anyway cos the move was so fast the hedge couldn't be adjusted quick enough. The guy who taught me to trade warned "It will take you 5 years to reprogram your brain to buy dips and sell rallies instead of the other way round". Trading is the hardest easy dollar you will ever make, and catching a move like the last 3 days makes it all worthwhile. The best moves give the best clues. Be a Nike trader, just do it and like Gann said "Never add to a losing trade"